The recently announced QE2 should be considered the only game in town. We briefly discuss the effects upon global markets, and why we have shifted to a risk-on stance. Beyond our usual fixed income and currency recommendations – which have performed very nicely – we are increasingly looking to boost exposure to global equity markets, in particular the BRICs and smaller markets of SE Asia. Our dollar shorts have been increased – with a wide diversification of the long positions. The consensus is not always wrong!
In short, we find that this is no time to be smarter than the markets, and that trading strategies must necessarily be short-term, given the limited clarity as to the ultimate outcome. Anyone who claims to know with any degree of certainty where this will end is either deeply insightful or, more likely, delusional. Instead, we think it an excellent time to remain flexible, taking advantage of the near-term trends, while remaining liquid and ready to shift positioning at short notice. It is a time to make – or to lose – a lot of money.
Readers should note that T&B has no further relationship whatsoever with our erstwhile sponsors, Otkritie. We shall, of course, continue to be as acerbic and independent as ever, though we would happily consider any new offers of sponsorship from institutions inclined to respect our editorial independence.
We are currently cruising the crystalline water off Papua, where, at least, the head hunters do not call themselves “Executive Search Consultants”. There is much benefit in taking a step back from the constant distraction of trading floors and high-frequency economic releases, though thanks to the wonders of technology, we can remain connected to the fevered pulse of global markets via the usual electronic media.
We have thus far managed to stay off the local menu (cannibals swim badly), and should be back in Singapore and Hong Kong for client meetings late in November. Anyone wishing to meet with us at that time should please contact us by e-mail. Readers are reminded that they are cordially invited to forward T&B to anyone they think might be interested – we write to be read!
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