Fodder starts with Nouriel Roubini arguing that Trump's policies are a key risk to the nascent global pick up in economic activity. Dr Bob Gay explains why Fed officials believe they can engineer a graceful exit from their experiment with asset purchases. Invesco's Stephen Anness and Andy Hall have written a terrific paper on the art of contrarian thinking of all types, including as it applies to investing. Prof Ron Bird reviews two new papers on factor investing - one on the little researched "quality" factor, and the other on a new approach to momentum investing. And finally, we feature the top-10 rated presentation by PIMCO's Joachim Fels at Markets Summit 2017 on why investors should aim for capital preservation until policy uncertainty lifts.
- All the best for another great week's continuing education - Graham
P.S. If you've visited Kings Cross, you recognise its iconic Coca-Cola billboard. This month, as part of Vivid Sydney, it features portraits from the unique Kings Cross / Wayside Chapel community, as part of part of the Wayside's winter fundraising appeal. Find out more

QUOTE OF THE WEEK...

Tell me and I forget. Teach me and I remember. Involve me and I learn. - Benjamin Franklin

LATEST...

Markets
The global recovery's downside risks
In the next year, a more robust and persistent global recovery will depend largely on whether policymakers avoid mistakes that could derail it.
Nouriel Roubini, Roubini Global Economics | Opinion

Markets
Capping QE
Fed officials must take the long view and hence tend to believe they can engineer a graceful exit. Their plan is somewhat akin to 'cap and trade' schemes for weaning the world of pollutants.
Dr Robert Gay, Fenwick Advisers | Opinion

Markets
Into the unknown: Ignore left tail risks at your peril
The world has now fully arrived in the radically uncertain, "stable but not secure" predicament. The only certainty is that the tails of the distribution of potential macro outcomes have become fatter.
Joachim Fels, PIMCO | 0.25 CE | Webcast
* Rated in the top 10 presentations by Markets Summit 2017 delegates

Investing
Research Review: Quality and momentum investing
Unlike other commonly used factors, very little research has been undertaken on the quality factor - which makes a newly released paper very interesting. Another new paper extends the usual momentum factor into "returns signal momentum".
Prof Ron Bird, UTS  | Review

Philosophy | Investing
Daring to be different - the benefits of contrarian investing
Literature from a variety of disciplines help highlight the qualities behind truly creative, contrarian thinking - qualities which can be applied to modern portfolio management.
Stephen Anness & Andy Hall, Invesco Perpetual | White Paper

Are assets overvalued?
Hi Tim Are interest rates unnaturally low? If I represent the yes argument I then hypothesize that economies (& employment) are “propped up” by these rates...
Mark Hayden, Hayden Financial Services | Comment

Asset allocation critical
Asset allocation is all about picking where the value lies in the asset hierarchy...
Chris Farley, Farley Financial | Comment

RECENTLY...

Finology
Revealing a client's true preferences
Game theory, econometrics and distributed computing power can reveal a client's true preferences for risk, loss, uncertainty, time and goals – with scientific precision and in terms that clients can understand.
Shachar Kariv, University of California, Berkeley | 0.50 CE | Opinion

Investing
The Hunger Bonds
Investing often creates moral dilemmas over goals. Should decent people put their money in emerging-market bond funds?
Ricardo Hausmann, Harvard Kennedy School | Opinion

Markets
Siegel v Shiller on equity valuations
Wharton's Jeremy Siegel and Yale's Robert Shiller squared off in a recent presentation about the outlook for equity returns.
Robert Huebscher, Advisor Perspectives | Opinion

Markets | Investing
Beware expensive factors
Investors should keep a close eye on relative valuations. Recent data suggests that momentum and value are trading cheaply in many markets, with low beta substantially over-priced.
Rob Arnott, Research Affiliates | Opinion

Strategies | Investing
The upside of less downside - how defence can win in Au equities
When equity markets fall - as they frequently do - the financial and emotional impacts can be lasting. By focusing on reducing downside, investors can have a smoother ride and still achieve the returns they seek.
Roy Maslen & Hamish Fitzsimons, AB Global | White Paper

Ratings uncertainty
...It is somewhat easier to assess the risk of companies where a given set of variables is known with some certainty...
Chris Farley, Farley Financial | Comment

Populism
This is nothing new... Democracies do not always elect the best or most suitable people, but they always represent the view of the majority.
Peter Hecht | Comment

Not always the majority
...By definition, Trump does not represent the view of the majority of US voters. He represents the views of the 46% who voted for him...
Deirdre Keown, PortfolioConstruction Forum | Comment

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