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G'day
We start this week with
two views on consensus. Tim Farrelly
argues against himself (a win-win situation) about the odds of an overwhelming consensus view proving unprofitable,
concluding
expert consensus is quite good at predicting
events, but less so markets.
GaveKal's
Anatole Kaletsky then warns about the strong consensus on euro/dollar parity.
Three
potential drivers are pushing things in that way, he notes, but four
strong economic factors are pressuring it the
other way.
From consensus to divergence -
Mohamed El-Erian believes global economic, monetary
policy, and market divergence is not going to abate, usefully grouping economies into
four categories.
Tim Griffen debunks more myths about Japan (e.g. the consensus that its
ageing population is a negative for its equities). And he explains why
the shift of its people from a deflationary to
inflationary mindset is also a major plus for its equity market.
Right on cue, Vimal Gor reviews a paper from the Financial Analyst's
Journal on
the effects of
different age cohorts on asset class returns. (Read the paper and sit the quiz to earn 1.75 CPD points).
Finally, anyone with bond funds in portfolios (all of us!) must absorb
Scott
Weiner's unique and clear insight into why bond funds may have to limit withdrawals
(it's one of the top 3 rated Markets Summit presentations, and one of my
favourites, too). |
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All the best for some great
weekend learning! - Graham
P.S. PortfolioConstruction Forum Symposium 2015 - 19/20 May, Auckland -
facilitating debate on the markets, strategies and investing.
Registration opens next week. |
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LATEST... |
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9 times out of 10 the consensus will be wrong?
When faced with a huge majority of experts expecting international
equities to outperform Australian equities, I blurted this out. I was
wrong, and on a few counts.
Tim Farrelly, farrelly's
| Opinion
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Beware the euro consensus
The US dollar is hitting new 12-year highs almost daily and the euro
seems to be plunging to below parity. But there are at least four
factors pressuring it the other way.
Anatole Kaletsky, GaveKal
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Opinion
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The messy politics of economic divergence
The world is increasingly characterised by divergence – in economic
performance, monetary policy, and financial markets.
Mohamed El-Erian, Allianz
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Opinion
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Demographic changes, financial markets, and the economy
This paper by Rob Arnott and Denis Chaves looks the effects of different
age cohorts on GDP and asset class returns.
Vimal Gor, BT Investment Management
| 1.75 CPD
| Research
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Bond markets lock up and lock out returns
Bond markets were once the world’s most liquid. Today, trading even $5
million in bonds can be difficult. Funds may limit withdrawals and hold larger cash balances.
Scott Weiner, Payden & Rygel
| Resources
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Rated in the top 3 presentations by Markets Summit 2015
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Member
comments
The stock-bond disconnect
This article raises
the question, but doesn't tackle the question of what will happen when
interest rates are eventually forced to rise to forestall inflation...
Chris Farley
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Wages after work
The wages v profits
argument here falls flat on the basis of changing demographics. The
proportion of former workers, ie retirees that no longer earn a wage and
are supported by returns on (their) financial capital, has been growing
and will continue to grow...
Aaron Minney
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A disconnect here
With respect to the
above comments, I do not think the question posed by the learned
professor was either of these issues. The issue posed in the first
sentence is framed in why do we have booming equity markets and
extremely low interest rates? I agree that it is more than deficient
demand and financial repression...
Craig Offenhauser
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RECENTLY... |
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ASX fund choices
The recent listing of the Magellan Global Fund has essentially
introduced a new structure into the ASX-listed and
quoted fund universe. With more choice comes more complexity.
Dominic McCormick, Select Asset Management
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comment
| Opinion
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The stock-bond disconnect
How should one understand the disconnect between the new highs reached
by global equity indices and the new depths plumbed by real interest
rates worldwide?
Kenneth Rogoff, Harvard University
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comments
| Opinion
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How should retirees manage risk in a DC world?
This paper offers a surprising amount of information and interesting
ways of framing investment issues in retirement, along with analysis of
longevity vs investment risk.
Angela Ashton, PortfolioConstruction Forum
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0.75 CE | 2
comments | Research
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The US stands out in a low growth world
Challenges of de-leveraging, widening inequality and structural reforms
limit growth in developed markets. The US is the most advanced in
addressing these.
Ronald Temple, Lazard Asset Management
| Resources
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Rated in the top 3 presentations by Markets Summit 2015
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Macro will not be the market
Macroeconomic outlooks may differ from where you can receive market returns. The outlook can be summarised in three words - improvement, divergence, decoupling.
Kevin Anderson, State Street Global Advisors
| Opinion
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Member
comments
Not a bear
I saw a comment to
the effect that bears were more numerous at this year's Markets
Summit...
I am in Europe now talking to institutional investors and the mood
definitely leans toward a 'melt-up' in asset prices and, in my judgment,
higher volatility as well.
Robert Gay, Fenwick Advisers
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PLUS...
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