The financial media loves a catch phrase and, with the apparent emotional hook of the ‘fiscal cliff’ diminished, we needed a new one. The current best candidate is the so-called ‘Great Rotation.’ The idea here is that investors, finally and completely fed up with the dismal returns from bonds, are going to move heavily back into equities. This is the ‘Great Rotation.’ When I Google the term, there are 820,000 search results. Not bad for a phrase that was invented in October 2012 (in a research note from Bank of America, apparently). Continue reading
Guest post by Contributing Editor, Robert P. Seawright, Chief Investment and Information Officer for Madison Avenue Securities.
Tom Stoppard’s Rosencrantz and Guildenstern are Dead presents Shakespeare’s Hamlet from the bewildered point of view of two of the Bard’s bit players, the comically indistinguishable nobodies who become headliners in Stoppard’s play. The play opens before our heroes have even joined the action in Shakespeare’s epic. They have been “sent for” and are marking time by flipping coins and getting heads each time (the opening clip from the movie version is shown above). Guildenstern keeps tossing coins and Rosencrantz keeps pocketing them. Significantly, Guildenstern is less concerned with his losses than in puzzling out what the defiance of the odds says about chance and fate. “A weaker man might be moved to re-examine his faith, if in nothing else at least in the law of probability.” Continue reading
Zoom. IPOs are making headlines again.
Ten companies completed their initial public offerings last week, making it the biggest week for IPOs since November 2007. Chinese offerings dominated, with Youku.com (YOKU), described as a “cross between the US’s YouTube and Hulu” jumping $161 in its first day of trading. That’s the largest “first-day pop since Baidu went public in 2005” according to Renaissance Capital.
Of course, IPOs are often volatile and for every Youku, there’s a Make My Trip (MMYT). That Indian online travel planning site has suffered a big drop in the last few months. Continue reading
Things down under are on the upswing. In the last three months, portfolios of Australian and Kiwi stocks have outperformed all other regions. Australia’s exports of minerals, metals and fossil fuels are strongly keyed to the strength of China’s economy. And as China’s economic news of late has been encouraging, including its strong long term investments in R&D, Australia has improved. Continue reading
The Wine, Beer, and Spirits Folio has been among the top performing sector bets in the past three months. Historically recession-resistant, this group has extra fizz from its broad geographic presence, developing markets potential, product innovation, and some very strong brands. More than a hot-weather rally for a few cool ones, this performance has been building for the better part of a year. Continue reading
Year-to date portfolios of African securities have outperformed all global markets. Besides possessing a wealth of natural resources, some countries are enjoying greater political stability and between growing domestic demand and fast rising trade with China, growth is expected to continue. A few months ago, Obiageli Ezekwesili, World Bank Vice-President for Africa Region, predicted that after a 1.7% drop in growth during the global economic crisis, Africa’s economy will grow 4.2% this year, and 4.5% in 2011. This week Barron’s put the continent under the cover in an article entitled “The Final Frontier.” Roger Nussbaum picked up on the story and discussed numerous African Index funds and ETFs. Continue reading