Eight Non-Consensus Views

Monday, December 19th, 2022

A bearish consensus can still be complacent

We agree with the idea that US equities are going to suffer in the New Year, but disagree with many of the assumptions surrounding this view. We think US Treasuries are behaving like a risk-asset and cite their current elevated volatility as evidence. We highlight the positive correlation between equities and bonds, which means that there we may well repeat the bear market of everything we saw in H1 2022. On this basis, the dollar strengthens temporarily and the trough in equities is delayed till Q3. When the recovery comes, sectoral and geographic leadership in equities in likely to change and China will be a much bigger part of the story than Western investors currently imagine. The outlook for oil is anyone’s guess, but it will influence inflation expectations and generate bursts of volatility in all markets, contrary to its current benign behaviour.

Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

In Praise of Cash

Wednesday, November 30th, 2016

What happens if the Fed surprises on the upside

US cash deposits are a neglected asset class. Our models suggest that US Treasuries, Gold and Investment Grade bonds have a low or no-better-than-evens chance of beating cash on a risk-adjusted basis. If you don’t have to own them, you should be reducing your exposure. Our numbers do not include the risk the Fed decides to surprise on the upside in 2017.

Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

Diversification in a Positive World

Wednesday, September 21st, 2016

Greater China is negatively correlated

This is the second part of our exercise looking at ways in which investors can diversify away from the threat of falling US Treasuries. This week we focus on global equities and argue that the best protection is offered by Greater China (including Taiwan and Hong Kong). This region is also on the positive watch-list in our All-World Country Equity Report.

Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

How to Manage Falling Treasuries

Wednesday, September 14th, 2016

Buy Credits where volatility is still falling

We think that the best way dealing with falling Treasuries is to stay in fixed income and to seek out situations in the credit markets, which are priced for high levels of risk, and where volatility is still falling. The problem with reducing duration or buying inflation-linked bonds is that the Fed and other central banks can force you to unwind it if they want to.

Filed under: Categories: , , ,
Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN

Safe, Deep Water

Wednesday, July 6th, 2016

We recommend US fixed income and EM equities

Don’t waste time worrying about all the things which could go wrong after Brexit. It’s better to focus on areas where there is potential for positive returns. We maintain our exposure to a broad spread of US fixed income and are adding to Emerging Markets in equity and fixed income. Find the safe, deep water; stay away from the rocks.

Synopses can be downloaded by subscribers holding a Harlyn All Access Pass
PURCHASE ALL ACCESS PASS
Already hold an All Access Pass? LOG IN