Note Précis February 7,2018: Rotation of Rotation: Unlike the fear and restructuring of 2007 to early 2009, more recent markets until February 2018 have been about complacency with liberal quantitative ease. Amid volatile trade, internal and global politics worldwide, miscalculations could take place. Even if for currently obscure reasons, likely to be next is rising vigilance in the capital markets. These changed dynamics for markets and central banks would be a rotation of rotation. Within the current business cycle in the sequencing of consumer spending versus production versus capital investment versus resource demand, the first phase has been elongated and potentially in excess. The elongation drivers likely lie in all of massive quantitative ease, major technological changes in retailing and the rise of emerging country consumers. Subsequent business phases are likely but be more volatile. Long term corporate project capital budgeting is unlikely to be on hurdle rates based only on presently minimal administered rates. As global growth continues, the future amplitude of interest rates is unknown. Rates are likely to rise with public deficits concerning. In the capital markets response to volatility, the availability of funds (leveraged or direct) is likely to be scarcer. Whether on fundamental or technical aspects, risk premiums are likely to rotate up. No change strategies have already been found vulnerable, whether on liquidity in volatility ETFs or on rotation to Europe and Japan based on lower P/E ratios versus the U.S.. There is all the more reason currently to have a quality, diversification and business sector tilt over one on low quality that has long benefitted from massive ease. It overrides even geographical rotation.
Kind Regards,
Subodh
We look to earn our independent research value for you. To avail of our services and complete note access information, contact us as below and on www.subodhkumar.com.
Our StrategeInvest précis is on Twitter at @subokumar ; on Google+ at www.Google.com/+SubodhKumarCFA; on Facebook at http://www.facebook.com/subokumar ; and on LinkedIn
Subodh Kumar,CFA/1.416.666.4590/mob:1.416.877.5603/fax:1.416.239.4590/Subodh Kumar & Associates – division of StrategeInvest Inc (Canada Corporation Number: 445643-2)/Thorncrest P.O.Box 60006/Toronto,On/Canada M9A-5G2/To remove mailto:subodh.kumar@sympatico.ca
StrategeInvest’s independent consultancy operates as Subodh Kumar & Associates. The views represented are those of the analyst at the date noted. They do not represent investment advice for which the reader should consult their investment and/or tax advisers. Any hyperlinks are for information only and not represented as accurate. E.o.e.
The value of investments may fluctuate up and down in value. Past performance is not necessarily indicative of future results. Our reports and documents may contain forward-looking statements or forecasts. Such forecasts are not a reliable indicator of future performance. Our commentary/analysis is not intended to, and does not, constitute an offer or solicitation to buy and sell securities or engage in any investment activity. Our reports are only for informational purposes with recommendations not made with respect to any particular investor or type of investor globally. Securities, financial instruments or asset strategies mentioned herein may not be suitable for all investors and do not take into account an investor’s particular investment objectives, financial situations or needs. Investors should seek independent financial and or tax advice regarding the suitability and/or appropriateness of making an investment or implementing the investment strategies discussed in our commentary or reports. Our commentaries and reports are as of their publication date with specific information that may no longer be current. There is no intention to update the commentary/report and should not be used to make an investment decision.