How Economical

How Economical

For 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. 

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M.A.G.A. or Nada?

M.A.G.A. or Nada?

Overall, 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.

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Deplora-Bull Market

Deplora-Bull Market

The big story internationally was the surprise election of Donald Trump on November 8th. This prompted an immediate rally in US markets; unfortunately, this also had a negative effect on international investments to close the end of the year and took a fair amount of our profits off the board, at least in the short-term. Despite US fundamentals pointing to valuations being over extended (Mr. Trump himself called the market “a bubble” during his campaign), day after day markets were pushed to new heights. The narrow Dow Jones Industrial Average hit new, record highs 17 times since the election!

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India, Ready to Roar!

India, Ready to Roar!

Overall, markets calmed down somewhat in the third quarter, after a tumultuous and volatile first half of the year. The EAFE International Index improved by 6.5% in the third quarter to finally climb into the green, up by 2.2% year-to-date. The Pendo International Strategy gained 5.6% for the quarter, and 11.5% YTD. 

One of our favorite long-term opportunities remains India, which in many ways resembles the China of 30 years ago. 

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Back to the Future!

Back to the Future!

Markets were true to form for the first half of 2016, fluctuating wildly with every news bit and then calming down with market data. The US’ S&P 500 was down by nearly 11% in February, yet finished the first half up 3.8%. The international EAFE index (Pendo’s benchmark) was even more volatile, falling nearly 13% at one point in the first quarter and rebounding somewhat to end the half down 4.0%.  The Pendo International Strategy followed a similar pattern, falling by nearly 9% in February, and recovering to finish the first half of 2016 up 5.5%. 

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Value Turns a Corner?

Value Turns a Corner?

After a horrible start to the year, markets have begun to turn around and while some (mostly US) have finally found positive territory, international markets continue to lag. Most individual international markets including the major indexes remain negative. As such, we are happy to have turned the corner and ended the quarter with a slightly positive return. What did outperform for the quarter were value stocks, which was helpful to us. We believe our strategy remains undervalued and should benefit greatly if this pattern continues.

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Keeping the Interest in Interest Rates

Keeping the Interest in Interest Rates

We have been critical of the government’s heavy-handedness and zero interest rate policy (“ZIRP”) over the last few years, worried that it was artificially propping up an economy that needed to establish itself and find its own equilibrium. It can be analogized as a youngster learning to ride a bike with training wheels, but the wheels are kept on too long and after seven years of well-intentioned help, you have a teenager who can’t balance on their own and must start from the beginning all over again. 

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Yuan A Piece of Me?!

Yuan A Piece of Me?!

Once 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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Entrepreneurs Club: Show Me The Money

Entrepreneurs Club: Show Me The Money

How to Finance Your Business Idea

The SACC New York Entrepreneurs Club discussed what it takes to finance a business idea. The panel discussion featured Richard F. Langan, Jr., Partner, Nixon Peabody; Joshua Siegel, General Partner, Rubicon Venture Capital; and Viktor Karlsson, President and CEO, Premune. Moderator Tina Larsson, Chief Investment Officer, Pendo LLC, guided the conversation, which covered a broad range of topics— from registering a company and finding an angel investor to preparing for an IPO.

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2014 Year-End Review

As we take a look back at 2014 (and ‘13, and ‘12, and…), we see a wake of volatility that continues to this day, even if the direct causes of volatility may have changed. Geopolitical uncertainty, economic instability, natural disaster; all have affected the markets, and what stands out to us is the amount of incidents this year, and how quickly things change. Mid-summer, Vladimir Putin’s belligerence seemed unstoppable (remember Crimea?). 

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