Archive

  • A healthy economy named after the famous children's story, "Goldilocks and the Three Bears."

    End of the 'Goldilocks' Economy

    A Goldilocks economy describes an ideal steady state for an economy whereby the economy is not expanding or contracting by too much. A Goldilocks economy has predictable economic growth, preventing a recession, but not so much growth that inflation spikes.

    April 4th, 2022
  • A re-think on portfolio construction.

    A Portfolio Rethink

    The 60/40 asset allocation mantra is dead. Long live 60/40. For the longest time, financial advisors constructed portfolios that were comprised of 60% stocks and 40% bonds or fixed income instruments. But the rising uncertainty due to rising inflation and interest rates, volatile markets, a spate of damaging geopolitical and climatic events, and increased awareness of social inequality has put a dent in this asset allocation methodology.

    March 3rd, 2022
  • The world still needs oil .. a lot of it.

    EVs and Surging Oil Prices

    Energy transition is in the cross hairs of oil prices going parabolic. While some say rising oil prices make energy transition investments economically competitive, there is another school of thoughts that suggests that surging oil prices present a much bigger threat to ESG and its constant need to justify its relevance with outperformance.

    March 3rd, 2022
  • The burning platform

    Printing Trillions: The Tale of a Burning Platform

    At no other point since at least 1999 have so many stocks been cut in half while the Nasdaq Composite index was so close to its peak. There is no precedent for when so many stocks were in a bear market, and the index wasn’t. Valuations are at highs, companies are raising billions based on fairy dust, and the Fed is signaling a tightening cycle. Are we on the cusp of a repeat of 1999-2000? Are the after-effects of printing trillions about to hit?

    February 2nd, 2022
  • Crash and Burn

    The Meme Frenzy Retreat

    Last year, it was really a tale of two stock markets - the one that was rational and valued companies based on cash flows and then you had a complete casino society. The meme-stock frenzy was a speculative bubble, an unmitigated disaster waiting to unfold, taking with it shores of retail traders.

    February 2nd, 2022
  • Rising rates, peaking inflation and the quantitative tightening.

    Don't Fight the Fed

    The Fed tightening is playing out, as liquidity removal since the start of the year has been driven by the bond market sell-off and equity weakness. Just because the Nasdaq is off 12% from the Dec highs, it doesn't mean that the tightening is close to being done.

    January 1st, 2022
  • Evergrande's credit risk and the Chinese market collapse

    A Minsky Moment or an LTCM Instance?

    Hong Kong is gripped by the fast-developing debt crisis at real estate developer China Evergrande Group, which is on the brink of skipping interest payments to banks. This has translated into a nasty selloff in Hong Kong, which has seen the Hang Seng Chinese Enterprises Index touch its low from the pandemic shutdown.

    August 8th, 2021
  • bnpl

    Afterpay Aftermath Afterwards

    Buy now, pay later contracts are point-of-sale installment loans that allow consumers to make purchases and pay for them at a future date. Consumers typically make an upfront payment toward the purchase, then pay the remainder off in a predetermined number of installments.

    July 7th, 2021
  • The COVID-19 petri dish

    Shipwrecked or Cruisified?

    Nobody in their right minds would want to go on cruises after the hell passengers have had to endure. The debacles on the Grand Princess, Diamond Princess and others due to the COVID-19 outbreaks have left people the world over with a very different vision of what a cruise experience can be.

    May 5th, 2020
  • Oil and gas may just be too indispensable to do away with.

    Chinese Democracy?

    If you are a big fan of Guns N' Roses, I am pretty sure you've listened to their album "Chinese Democracy", incidentally released in November 2008 at the height of the mortgage crisis. Great song, not in the same ilk as one of their classics, but that's not the point. I wanted to invoke the phrase and perhaps delve deeper into what that means today.

    April 4th, 2020
  • Zero interest rate policies

    Zeros or Zeroes?

    Central banks across the world, collectively and extraordinarily have engaged in loose monetary policies for the better part of the last decade. Globally, there's anywhere between $12-$15 trillion of negative-yielding debt and the US is hurtling toward's this point of no return.

    April 4th, 2020
  • Oil and gas may just be too indispensable to do away with.

    Don't Run Out Of Energy!

    Value investors are screaming energy is cheap! And although fossil-fuels are bastardized due to the impending EV wave about to sweep the world and the Greta Thunberg effect (and rightly so), they still very much form the basic fabric of our daily lives.

    March 3rd, 2020
  • The passive bubble is about to pop

    The Passive Investment Bubble

    "A turkey is fed for 1,000 days by a butcher, and every day confirms to the turkey and the turkey's economics department and the turkey's analytical department that the butcher loves turkeys, and every day brings more confidence to the statement. But on day 1,001, there will be a surprise for the turkey ..."
    -- Professor Nassim Nicholas Taleb

    March 3rd, 2020
  • Perpetual monetary easing.

    The Powell Put: Should the Fed Cut Rates?

    To cut or not to cut is the question. A biological shock, an outbreak such as COVID-19 can have undefined boundary conditions. Nobody really knows the lasting effects or the duration of this pandemic. It is this very uncertain nature of this event that demands caution and careful monitoring from the Fed.

    February 2nd, 2020