December 2011
Retrospective 2011
In this note we review our thoughts and predictions we made at the beginning of 2011. For all intent and purposes 2011 was looking to be another year of recovery for global economies and the financial markets. How wrong this was. The optimism enjoyed in the first months of the year evaporated quickly as global economies were battered by civil unrest in North Africa, a Japanese earthquake of Nuclear proportions and the developing crisis in Europe. Never one to hide behind the annals of time we present, as we do every year, our January 2011 Outlook note and throughout this...
Read the Full NoteDecember 2011
Silver Bullet?
Will the salvo of collective action from global central banks be big enough and of sufficient calibre to add up to a silver bullet? Earlier this week the US Federal Reserve led a group of other international central banks in reducing the rates paid by the European Central Bank for US dollar loans in an attempt to alleviate liquidity problems for Euro zone and other non-US retail banks needing to access affordable US dollars via swaps. Earlier this week the US Federal Reserve led a group of other international central banks in reducing the rates paid by the European Central...
Read the Full NoteNovermber2011
Mon Dieu!
Markets remain on tenterhooks and are easily panicked. Late last week, bond markets were suddenly hit by the news that the rating agency Standard and Poor’s had apparently downgraded the AAA credit rating of France sending bond yields skyrocketing from 3.19% to 3.45%. It transpired that the news was false created and nothing more than a website link to a section on the S&P’s website entitled “downgrade”. Not only was the agency forced to put out a statement admitting the error but also confirming was not even as a result of the rating being under review. However, the event illustrates...
Read the Full NoteNovember 2011
Flash Rally
Investors resolve will be tested as the big issues refuse to go away. Anyone who’s ever been caught up in a flash mob will probably agree with the popular definition of a group of people who assemble to perform an unusual and sometimes seemingly pointless act for a brief time and then disperse. At TAM International, we think we have seen a similarly puzzling event taking place in the stock market rally the catalyst for which being the latest rescue package for Greece and politicians hailing a final “comprehensive solution”. It would be nice to think that as the FTSE...
Read the Full NoteOctober 2011
Look to the Horizon
Market Volatility - However difficult we must look to the future. When travelling by boat we are told to focus on the horizon to prevent sea sickness and when skiing, not to look at our feet but rather ahead to prevent us from falling. This advice could apply equally to the situation in which we now find ourselves; in an incredibly volatile financial market, one dominated by an endless stream of negative headlines speculating about the collapse of the global economy. Nausea can affect even seasoned investors distracted by wild daily swings. However, we believe that it is wrong to...
Read the Full NoteAugust 2011
Tectonic Plates
Expect Increased Volatility As We Move Into a new “Normal” Corporate earnings and economic growth are not always easy bedfellows; often an increase in one precedes an increase in the other, and vice a versa.This ‘normal’ action causes both volatility and investment opportunities over time. It is not uncommon however for these two “tectonic plates” to stick, then shift violently to cause severe spikes in market volatility and value. A catalyst typically precedes such events.Following three months of seismic activity and pre-shocks we finally witnessed a huge shift this summer as the realisation dawned that economic growth was failing to...
Read the Full NoteAugust 2011
Insider Trading?
Conspiracy theorists of the world unite! As we highlighted in our investment note of Friday there was no one piece of economic or fundamental news that should have caused an almost ten percent sell-off in global equity markets. Mostly the news, whilst not particularly negative, was “tepid” and we were ourselves somewhat surprised at the depth of the reaction. Our thoughts last week were there may be much to consider in the coming 7-10 days as it all seemed a little too contrived. And lo! After trading hours, late into the Wall Street night following the closure of markets on...
Read the Full NoteAugust 2011
A Time to Defend not Attack?
As “Short” Traders Make Hay Whilst the Sun Shines? It is difficult to point to a single event that triggered this move towards safe haven assets causing equity markets and bond yields to fall to their lowest levels of the year. Indeed much of the bad economic and geopolitical news has been in the public domains for weeks if not months! Debt issues in the US and the Euro zone are well documented and so is the inability of our central bankers and politicians to effect any meaningful (and long lasting) solutions! So is the extreme volatility we are now...
Read the Full NoteJune 2011
Risk On, Risk Off
Directionless markets focus on short term news. A glance at the chart of any of the major global equity markets reveals that equities have barely moved a step since the beginning of February, around the time when events in Egypt began to escalate. Since then geopolitical events and natural disasters have seen equity markets develop into a saw-edged pattern reflecting very short term “risk on, risk off” trading with no real direction. The financial media attempt to ascribe a wholly discreet reason for every twitch and turn in daily movements, but it remains a frustrating market for those trying to...
Read the Full NoteJanuary 2011
Our Review of 2010
In this note we review our thoughts and predictions we made at the beginning of 2010. At the beginning of 2010 many were still shell shocked from the rollercoaster ride that was 2009 but some investors, including us, predicted a profitable investment year for 2010. Indeed we believed that the 2010 would mark the beginning of a new era of opportunity for investors, an era that would not take its cues from the ‘lost decade’ we had just witnessed but one that would see the beginnings of solid longer term growth. Never one to hide behind the annals of time...
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