Our portfolio had a nice start to the year, continuing into April to date. This was despite the same two unresolved major macro-economic issues, namely a US trade deal with China and Brexit, that had a deleterious Q4 effect.
Indeed, these issues have created uncertainty in the markets for the last couple of years. There are recent talks however, indicating that a trade deal with China may be near.
Read MoreThe worst performance of the year award goes to… China!
China’s domestic A-shares were the world’s biggest loser in 2018.
We had fortunately reduced our exposure to China after the last run-up. We now are analyzing the situation and considering putting more chips back on the table, so to speak. Let us explain why:
Read MoreThe Third Quarter proved difficult both on a relative and absolute basis. Emerging Markets took a terrible hit, including China and especially South Africa.
SA took a hit in conjunction with slowdowns in their economy, political unrest, and particularly the difficult headwind of the further strengthening of an already strong US dollar.
Read MoreAfter a favorable end of 2017 and beginning of 2018, geopolitical uncertainties hurt foreign markets and currencies in the second quarter.
The media coverage of a “trade war” has helped fuel increasing volatility. Increased volatility, coupled with increased fed rates, has resulted in a stronger US dollar and weaker foreign currencies.
Read MoreThe first quarter was “interesting” with the return of massive volatility. Overall, markets foreign and domestic reacted by wiping out the January gains to finish the quarter slightly underwater.
We have long expected that the prevalence of increasing economic information and reporting combined with the ever-larger computer driven investment funds would result in a mass disarray, and boom, there it is!
Read MoreThere’s always a lot of talk about “the next big thing.” Will it be self-driving cars, artificial intelligence, robots, fin-tech, re-tech, cloud computing, block chain, streaming- or something completely different?
We wish we had a crystal ball for the answer to this, but unfortunately we don’t. What we do know is that online retailing took many years to reach a point where it actually became a threat to brick-and-mortar stores.
Read MoreFor most, financial and economic forecasting is considered a relatively boring subject (that we find it fascinating and fun may explain why we are available most Saturday nights on short notice). OK, let’s edit “relatively boring” and just admit that most find it “extremely boring” and would rather attend a Kars4Kids concert than spend time performing or reading economic analyses and forecasts. It is generally a deep review and comparative analysis of current business cycles, myriad statistics, dry surveys, etc. and applied toward the future based on statistical analysis, historic comparisons, trends and experience. We will try to be more conversational here.
Read MoreOverall, foreign markets faired very well in the first quarter. The EAFE International Index ended the first quarter up by 7.4%. The Pendo International Strategy posted a 9.5% gain for the quarter. After years of volatility and taking a back seat to domestic markets, we see (finally) a reversion to the mean, and favorable fundamentals for international markets finally being realized and bearing fruit. We believe this will continue for the foreseeable future.
Read MoreOnce again China has commanded the headlines, this time over the miss-characterized “devaluing” of the yuan renminbi (RMB), the Chinese currency. The currency wasn’t so much directly devalued as it was allowed to more widely de-peg from the US dollar and let market forces play a more direct role in the valuation of the currency. This lead to a weaker currency.
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