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Weekly Investment Research Digest - 7 Sep 2013

September 07, 2013 – Comments (0)

This edition of the Research Clippings Weekly Investment Research Digest features insights features research on emerging market inflation linked bonds, municipal bonds, broader emerging market debt, upside risks to the oil price, the improving global economy, Japan's recovery, some important points on equity portfolio strategy, and some notes on the German election.

Emerging Market Inflation-Linked Bonds - A Primer
This primer on emerging market inflation linked bonds from AXA Investment Management provides an interesting look at this 'emerging' specialist asset class. The emerging market inflation linked bond sector has grown strongly and offers the potential for yield enhancement.  [more]



Weekly Investment Research Digest - 31 Aug 2013

August 31, 2013 – Comments (0)

This edition of the Research Clippings Weekly Investment Research Digest features insights on emerging market equities, Australian equities, the challenges facing emerging markets, the implications of rising rates and inflation, and thoughts on asset allocation in these challenging times.

Are Rapidly Rising Yields A Potential U.S. Equity Roadblock?
In this short blog post BCA (Bank Credit Analyst) looks at an ominous indicator for the US stock market and explain why they are tactically cautious on the US stock markets. The key factor they are alerting to is the rapid rise in bond yields; particularly in relation to operating earnings. In the past this indicator has signalled market weakness.

Australian Equities - Depth Down Under
Andrew Sisson of Franklin Templeton discusses why investors shouldn't rule out Australian equities, and further why they shouldn't just view Australian equities as a commodity play. Sisson points out that while best days of the mining boom are probably past, the proactive approach to rebalancing the economy to boost the non-mining sector will bring opportunities. In the shorter-term the recent significant drop in the currency, interest rate cuts, and passing of the election uncertainty should be positive for Australian stocks.

Quiet August Preceding Busy September
Dexia Asset Managment explain their view on recent global macro developments and the implications for asset allocation positioning. Dexia notes the surprisingly good run of data in the US and Europe; noting their preference for European and Japanese equities. They prefer equities over bonds on improving economic momentum and anticipate the US Federal Reserve will not let rates get out of control, while also seeing bond investors increasingly anxious.

Stop Benchmarks From Biting Your Bond Portfolio 
Kathy Jones of Charles Schwab explains why investors should re-examine their bond benchmark and overall approach to bond investing as key bond benchmarks have become skewed to US government related securities. Similarly the average duration score of the indexes have crept up; meaning higher sensitivity to rising interest rates. This concentration of exposure and higher interest rate risk suggests investors should revisit their approach, perhaps considering a greater weight to corporate bonds, international bonds, and emerging market debt securities.

Is Asian Turbulence a Win for China? 
Anthony Chan of AllianceBernstein outlines why the sell-off in emerging market currencies and bonds is not the harbinger of another Asian financial crisis like the one seen in 1997. Chan notes that policy makers have a lot more options this time around, and that external indebtedness is far less. Interestingly Chan points to the developments as an opportunity for China to further build its economic and financial influence in the region and signal its strength.

Planning for Inflation: The "Real" Deal
Michael Fredericks of BlackRock discusses the inflation "facts of life" for investors and notes that while inflation expectations are presently very low, the significant monetary stimulus in the system could bring higher inflation down the track. Fredericks suggests investors should prepare their portfolios in advance for this scenario by including a range of inflation sensitive investments in a multi-asset portfolio, while retaining flexibility in approach and allocation.

Monetary Challenges for the New Governor
Chan Yee Lui of CEIC discusses the challenges facing the incoming Reserve Bank of India (RBI) Governor, Raghuram Rajan. India made headlines over the past few weeks as the Rupee sold-off while capital outflows were also significant. Alongside this is structurally high inflation. Raghuram Rajan will need to take a collaborative process between the monetary authorities and the Government to address these challenging economic conditions.

Is the Story of Emerging Markets intact?
Giordano Lombardo of Pioneer Investments discusses recent developments in the global asset classes; particularly around the prospect of rising interest rates. While on emerging markets he sees bonds unattractive due to a low credit risk premium, he sees EM equities offering selective value opportunities. On the prospect of rising rates, their work shows historical tightening tends to be more reflective of inflation, and has not necessarily been negative for equities.

Have Emerging Markets Gotten Oversold?
Mark Mobius of Franklin Templeton Investments discusses the underperformance of emerging markets relative to developed markets over the past year. He talks about the reasons why this short-term under-performance has occurred, and highlights the still solid long-term fundamentals; concluding that while there are risks, the combination of strong growth and cheap valuations make a strong case for emerging markets.

The Purgatory of Low Returns
James Montier of GMO discusses asset allocation in the current environment of low yields and relatively high valuations across the asset classes. He notes investing in bonds is likely to lead to mediocre returns at best, and that owning bonds is akin to betting on deflation. He discusses the options for asset allocating in this environment, and concludes that patience (and cash) might be the best option.  [more]



Green Shoots In Brazil - Is It A GARP Opportunity?

December 11, 2012 – Comments (0) | RELATED TICKERS: EWZ , BRAQ , BRF

Wind the clock back a couple of years and you wouldn't think of the Brazilian stock market as a value play - if anything it was part of the emerging market super-growth bloc that promised permanent double digit returns. But is it time to review the situation? Does the Brazilian stock market present a compelling value opportunity or has the market simply priced in a new lower-growth higher-risk environment?

Full story:  [more]



Bear No More - It's Time To Get Beta In China

December 03, 2012 – Comments (0) | RELATED TICKERS: FXI , MCHI , CHIQ

The Chinese stock market has had a volatile year, initially rallying before slumping as concerns about a hard landing culminated in speculation on the end of the Chinese economic growth model. If history shows us anything it's that people will always overreact; on the down side and the upside. But is it an overreaction to still be bearish on China?  [more]



Top 5 Videos on Billionaire Investor Warren Buffett

October 09, 2012 – Comments (0)

Warren Buffett is primary shareholder, chairman and CEO of Berkshire Hathaway, and ranks amongst the world's wealthiest people. Warren Buffett made much of his billions through applying his keen business sense and his value oriented investment style - he sees his core talent as being a skilled allocator of capital; and owes much of his investment success to picking skilled managers and letting them get on with running the business. Clearly as one of the world's most successful investors, his methods and path to success have been closely studied by many aspiring investors around the world, and in a game where knowledge is power it makes sense to learn from this master of investing. The following 5 documentaries provide an insight into the life of Warren Buffett, how he made his money, what he thinks about, and how he invests.

1. Warren Buffett Revealed
This Bloomberg documentary provides an interesting look at this legendary investor, telling how he became interested in stocks early in his life and became a disciple of the 'father of value investing', Benjamin Graham (author of the book "Securities Analysis"). Buffett mastered the style of value investing and with instincts and gumption made a strong start, but he really took things to the next level when he orchestrated the takeover of Berkshire Hathaway; later focusing the business on insurance - allowing him access to a sizeable pool of investable assets

2. The World’s Greatest Money Maker
This BBC documentary offers an intimate look at the life of Warren Buffett, how he made his money, how he operates, how he came to operate in the way he does, and how he thinks about his wealth. It also takes you on a tour of his office and the annual shareholders meeting of Berkshire Hathaway, not to mention a peak at his many eccentricities.

3. Biography – Warren Buffett
This biographical documentary takes you through the life of Warren Buffett; how he developed his value investing philosophy, how he came to be majority owner and CEO of Berkshire Hathaway, his frugality, his upbringing, his key choices in life, his mentors, the turning points and defining moments.

4. Warren Buffett – Going Global
This video is more about an applied look at how Warren Buffett operates, the CNBC show follows Warren on one of his rare trips overseas, including a look at one of his first offshore acquisitions - ISCAR. This video shows how folksy, old fashioned, and down to earth the billionaire investor is, but it also shows how he is quick to realise a good deal and his talent for allocating capital. It also shows his brilliance for identifying great companies and strong capable management teams and letting them get on with the business for him.

5. Warren Buffett MBA Talk
Finally we get a talk from the man himself, with some key messages for the MBA students he is addressing on the importance of integrity, intelligence, and energy for success; but that there is more to it than intelligence and energy - without integrity a person can become dumb and lazy. He also opens the floor to some interesting and thought provoking questions, providing an eye opening look into how the man thinks and what he sees as the key issues in business and investing.

Thanks to for finding all these documentaries (and others!) 

Source:  [more]

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