Markets are known for offering investors lessons in humility. On the one hand, Warren Buffet suggests that “humility can make you rich.” On the other hand, a lack of humility, typified by chasing unsupportable gains (aka Bernie Madoff), can lead to ruin. The difference in outcomes rests on the ability of investors to gauge the market.
Humans have an innate tendency to discern patterns and connections between otherwise unrelated things. Psychiatrists have termed this ability as apophenia. It’s an essential trait to make sense of an otherwise random world.
These days it is easy to be cynical. Writing this on the eve of a U.S. government shutdown, it seems that our leaders and institutions too often disappoint us. Perhaps the truth about our leaders and institutions was always oversold, yet we chose to believe differently.
The U.S. economy is in the late stages of an expansion, and speculative excesses are beginning to proliferate. Risk assets will probably perform well in 2018 but increasing caution and portfolio conservatism are warranted
Over the course of 2017, we integrated big data analytics into Northwest Passage Capital Advisors’ tracking of global events. As part of our firm’s ongoing “Boots in the Cloud” research initiative, we are actively leveraging the vast data potential of the Global Database of Events, Language, and Tone (“GDELT’’) to gain a fuller and better-informed perspective on world events impacting emerging markets.
As 2017 ends, investors are fully engaged in a seasonal event as much a tradition as eggnog or caroling this time of year. It’s forecasting season.
While difficult to recognize the signals in real time, most economic cycles follow a recognizable pattern apparent in hindsight.
Across Latin America, voters have rejected populism, of both the far right and left variety, moving to a more centrist position. A case in point is Argentina.
Results reflect a benign environment for fixed-income assets with EM bond markets tracking the overall strong performance of risk assets.
The Olympic motto (“Swifter, Faster, Stronger”) captures the essence of competition; that through competition the best is brought out …
January 31, 2019
Once in Golconda by acclaimed financial reporter John Brooks chronicles the market events leading up to the 1929 crash and its aftermath. Golconda was a term used in the late 1880s to describe great wealth. The use of the word is a reference to Golkonda, a medieval fort in Southern India, home to some of the world’s most productive diamond mines. In fact, it’s where the Hope Diamond was discovered. Indian folklore refers to the city as a mythical place where everyone who passes through acquires wealth.
A confluence of factors has made 2018 a critical year for corporations seeking to de-risk sponsored defined benefit pension plans. Rising equity markets and higher interest rates have improved funded status across the universe of U.S. corporate plans, while sharply higher variable Pension Benefit Guaranty Corporation premiums have made the costs of carrying unfunded pension liabilities far less economical.
December 30, 2018
While holiday songs suggest that there’s a naughty and nice list imploring us to be good for goodness sake, we mostly take for granted a Christmas visit from Santa Claus. Stock traders too are hopeful this time of year for the gift of early December performance to help boost their annual returns.
November 30, 2018
The holiday season is upon us and for many this means spending time with family and friends. At parties and gathering this time of year we naturally find ourselves reminiscing about life’s various milestones, both joyous and sad. My favorite stories are those that touch on the follies of youth.
October 30, 2018
With the markets responding to the threat of declining liquidity, the value restoration process is underway. The Federal Reserve has been raising interest rates since December of 2015 in a gradual, measured manner which is finally starting to bite.
August 27, 2018
August days in financial markets tend to be quiet. Volumes contract as many investors take to the sidelines. This time offers a chance to spend time with families and friends, read a book, enjoy a beer; in short, it’s a good time to sharpen our axes for the fall.
June 28, 2018
Just a month ago markets appeared enamored with President Trump’s agenda for deregulation, tax reform and fiscal stimulus. The prospect of protectionism was viewed as mere rhetoric from a president in perpetual campaign mode.
May 31, 2018
Like greenskeepers carefully tending to the needs of golf course greens with the arrival of spring, central banks face an equally delicate task of restoring national economies showing slower signs of life without killing off healthy ones, and seek stability over wild undulations.
April 30, 2018
In his new book, psychologist Steven Pinker details how the human condition has steadily improved over the past millennia. His data suggests that we enjoy longer, healthier and happier lives than our ancestors; that we have made significant progress against disease and starvation; and we have experienced a steady decline in deaths resulting from wars, natural disasters and crime.
April 16, 2018
The last 30 plus days have seen a dramatic unfolding of events involving Russia. The combination of rising political tensions, new U.S. sanctions and another chemical weapons attack in Syria have put investors on edge. The conundrum facing investors is whether this new Syria crisis will quickly fade or linger given other cumulative effects.