Equity bears were further humiliated last week. Even investors positioned cautiously had to suffer the pain of watching the market destroy their relative performance. If you're coming into the Christmas period with a good bag of returns, it won't matter much. But if you have underperformed, it will sting to watch the market run away with the prize into year-end [1]. Luckily, the portfolio falls in the former category this year; no matter what happens 2016 will be a good year. The shorts in FTSE and Home Depot have been scathing in recent weeks, and the so far ill-advised punt on Syntel also remains a severe drag. But the overweight in financials via Wells Fargo and Sabadell, and the push higher in Japanese equities, has spared yours truly the worst embarrassment in the amateurs' peanut gallery.
Read MoreThese exercises inevitably turn into a "look how smart I am" post, but I love when others do them. My friend Jonathan Tepper usually does one every year, and I always find something interesting on it. Tyler Cowen's 2016 non-fiction list is here, and is full of gems. The FT editors’ recently gave their suggestions too, Shane Parris has chimed in, and Toby has listed the favourites of FinTwitter where my suggestions, inexplicably, have been left out. No matter, however, because I have listed them all below.
Some of the titles invariably are from 2015, but I thought I that I would include them anyway. In addition, I should note that over half of them have been consumed via Audible. If you don't already have a subscription, go get one. I have separated fiction and non-fiction. I dare you not to find one or two that would be worth your time.
Read MoreOne the more enjoyable things about reading Macro Man in recently is that the author's mood, as well as the spirit of the more battle hardened of his commenters, have been lifted significantly. This is not because they necessarily wanted Mr. Trump to move into the White House, but rather because the political shock in the U.S. appears to have brought back good old fashioned, active, macro trading.
I am not sure it ever left, but I sympathise with the idea that the change in political winds in the U.S., and Europe, will unlock hitherto barren markets for swashbuckling macro investors. The added joy of such a story would be that the index huggers and risk-parity brigade would see their clout diminished somewhat. After all, bond yields are now rising again, and next year's political constellation in Europe could well create a number of new currencies to dabble in. I doubt Macro Man will be that lucky, though, but one can always dream I suppose
Read MoreMy last post was a copout, but necessary for me to express where I think things stand without going off on a million tangents. I think that maintaining an ultra-cynical view on markets, and the economy, now is critical. Recent political events have injected a huge amount of emotion, and I dare say anger, into the economic and financial market debate. It’s tempting to jump in both feet first, but investors are ill served by letting their own views and biases steer their decisions. This will sound obvious, but it isn’t always easy to follow.
Sometimes, though, a cynical approach can only come after a cathartic release of your own opinion and views. This post does just that, and I am going to piss off a lot of people. So close your browser if you’re not interested.
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