Macro Perspectives
Thematics
May 2010
Britannia thesis
- As forecasted in April 2009, the Armageddon/Depression scenario did not materialise.
- Clients that currency switched out of USD & EUR into AUD & GBP last year have been rewarded.
- On a relative value basis we think that GBP is undervalued versus AUD.
Britannia Thematic.pdf
September 2009
Inflation thesis
- The process of economic stabilisation is underway, fuelled largely by Government Intervention and lax Monetary Policy, but everyone knows there is no such thing as a free lunch.
- Many commodities have doubled in price year-to-date. Should this be viewed as an early warning sign of impending inflation?
- Do official Inflation figures correctly capture price pressures or should we view them with skepticism?
- If preserving purchasing power is our goal, we should ask ourselves what will be different this time?
Inflation Thematic.pdf
February 2009
Insurance thesis
- Financial stocks have been hit hard in the wake of the Credit Crisis. Across the financial sector the stock prices of banks, insurance companies and other financial institutions have sold off dramatically.
- Investors can not see the wood from the trees, as extreme uncertainty and concern over capital adequacy have shifted the valuation process away from fundamentals.
- Despite the economic downturn, many insurance companies continue to sell insurance, pay claims and produce positive operating results. We believe that as the markets continue to normalise, investors will once again recognise their true value.
Insurance Thematic.pdf
January 2009
Treasury Bond thesis
The bursting of the housing bubble helped to spark the current credit crisis; recognising that decoupling was a myth and that the global slow-down would prick the commodity bubble helped fuel one of Oil's greatest sell-offs. Now we face our third bubble, one within the US Treasuries market. This bubble has been formed by intense investor flight to quality and general risk aversion. We believe that this bubble is at risk, and in our view presents an excellent investment opportunity.
Treasury Bond Thematic.pdf
October 2008
Convertible Bond thesis
- Deleveraging has forced many assets into distressed territory;
- Convertible bonds represent an asset class with limited downside and considerable upside;
- A concrete catalyst exists which we believe will help drive this market back to normalcy.
Convertible Bond Thematic.pdf