Investment Note

Market Insights 2010


Europe - PIIGS Might Fly

We assess the contrarian view against a background of unremitting gloom.

Europe s initial rescue plan for Ireland gave rise to a brief relief rally for stocks and the Euro but was short lived as the familiar fears of contagion to the other beleaguered Euro zone countries of Portugal, Spain and Italy were stoked by continued negative sentiment in the media and conflicting messages from European politicians and policymakers.

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Safe as Houses?

Unfortunately the old adage does not always ring true.
Early in 2010 we identified the UK property market as one which potentially offered some compelling shorter term investment opportunity. Historic low interest rates, collapsing property valuations and a growing need for higher yield began to put property back  in play . Our cautious outlook for low risk fixed income return rekindled our appetite in this market area.

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Currency Wars

The Implications for International Investment.

We all read the headlines throughout the summer;  The Dollar is going to reach parity with the Euro . Pundits and investors alike agreed, the debt situation in the euro zones peripheral nations was unsustainable and a collapse of the European  experiment was a distinct possibility.

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Japan Once More Unto the Breach Dear Friends

With the Japanese Yen at 15 year highs is it time to revisit Japan?

You may recall our successful foray into Japanese equities in September last year which turned a profit for many Investors. We believe that a similar short term opportunity may be presenting itself now and are seeking to recommit investors, albeit for different reasons.

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Hubble Bubble Toil and Trouble

As Gilt Yields Fall to Historic Lows we ask  has a bubble is formed in the Sovereign Debt Markets? Each piece of positive economic data released seems to be followed by two negative ones leaving financial analysts and investors scratching their heads as to the underlying health of any economic recovery and thus the direction of financial markets. As a consequence equity market volatility has risen even though markets remain range-bound, moving higher or lower depending upon last news or data release.

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How to Invest in Gold?

With Gold reaching historic Highs we investigate methods of investment.The spot price of Gold has surged over the last few years as demand for the precious metal has risen. Demand has not only increased from traditional sources (the Jewellery and industrial sectors) but from investors drawn to the metal for its perceived  safe haven appeal during times of economic turmoil, hedge against the US dollar and inflation and on a pure speculative basis.

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Supercalifragilisticexpialidocious?

Should Governments be cutting budget deficits or stimulating the economy? First we had the  PIGS followed by  PIIGS , then as Hungary announced that they could suffer from a Greek-style credit crisis (a claim that appears to be more about political scare mongering than fact) we had the  PHIIGS ; will it soon be all the weak economies and be  Supercalifragilisticexpialidocious ?

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Sell in May and Go Away?

Not this year?

The Greek debt crisis is unfolding with predictable contagion to the Stock and Bond markets of the other three horsemen which we highlighted in our February Investment Note  Spain, Greece, Italy and Portugal  The Four Horsemen of the Apocalypse?

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The Greek Tragedy - Contagion in Europe

Could the Greek crisis threaten the euro zone? A wave of risk aversion is, in the short term, sweeping the global financial markets, sparked by further concerns over the viability of a European aid package to the Greek Government. Fears that the issues in Greece may spill over to the rest of Europe s debt-ridden countries, has weakened the Euro and threatens to derail a still fragile global economic recovery.

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TAM International Enhances Transparency of Product Profiling

Consistency and Transparency. Over the recent months, TAM International has been striving to refresh its portfolio offering to increase the transparency of our products and enhance information delivery, in line with the regulatory principles related to  Treating Customers Fairly . This has resulted in a review of our existing portfolio type names, benchmarks and quarterly fact sheets which, we believe, enhances information delivery to ensure that product and portfolio offerings are clear, concise and more readily understandable. These changes are set out in detail below.

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The UK Gilt Market Revisited

One year of feast and seven of famine? Throughout 2008, we held overweight positions in UK Government Debt (or  Gilts ) for our sterling based clients  it was the only safe haven in a ferociously volatile market. However, our June 2009 Investment Note,  Gilts Face Mounting Headwinds , highlighted some of the issues which we thought would create obstacles for Gilts during the remainder of the year and into 2010. Record low interest rates and substantial quantitative easing efforts (which could not last forever) led us to conclude that Gilts, at that point even, were showing signs that they had run their course.

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Spain, Greece, Italy and Portugal; The Four Horseman of the Apocalypse?

Sovereign debt issues throughout Europe are hindering markets. Global equity markets started the year well, initially posting solid gains and moving stronger. However despite a better than expected fourth-quarter earnings season, risk-aversion has returned pushing markets back into negative territory for the year driven most prominently by the sovereign debt issues that are now befalling the southern states of Europe.

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TAM International Outlook for 2010

A year of Specific Opportunities. "Bull Markets climb walls of worry but we must not ignore the obstacles still ahead"-Phillip Hadley, TAM International Managing Director. We believe that 2010 will offer strong opportunities for those able to navigate the obstacles ahead and has the potential to be another rewarding year for investors.

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A Review of our 2009 Investment Notes

Were we right or were we wrong? We would like to take this opportunity to review our ad hoc Investment Notes presented in 2009 and critically assess whether we were right or wrong, where appropriate. We give a summary below of each note, together with our views on how accurate we believe the note turned out to be and the bearing each had on our portfolio positioning.We would like to start with a reminder of our  Outlook for 2009 document below which was published in January 2009. We will leave it you to judge how accurate the predictions on this first page were.

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