Investment Insights are written by Angeles' CIO Michael Rosen
Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, trader and academic.
SEVEN LEAN YEARS? DONE IN SEVEN MINUTESPublished: 04-30-2015
In Genesis (41:27), Joseph interprets Pharaoh’s dream of 7 fat cows followed by 7 lean (and apparently, ugly) cows, as foretelling the coming feast and then famine, enabling Egypt to prepare for the coming 7 lean years by stockpiling reserves.
Yesterday, the 10-year German bund leaped 12 basis points (see Graph below), along with a surging euro following the weak US GDP report. Now, 12 basis points is a big move, but we’ve seen bond yields move by that magnitude before. What is different about this time is that there is no yield to begin with, so yesterday’s move in the bund wiped out 7 years (!) of income.
If investing at near-zero yields for 10 years is rational, it will prove to be the worst decade for investors since the bubonic plague swept across Europe in the mid-14th century (ok, I made that up; but it could be right). But I’ll bet that it is not actually a rational investment, and monetary policy is distorting all kinds of prices and investment decisions.
Two weeks ago (13 August, No Panic (Yet)) I noted that the renminbi devaluation was officially described as a modest ...READ MORE
Housing Has Legs 05-24-2016
Surprisingly strong housing numbers out this morning: new single-family homes rose 16.6% in April to an annual pace of ...READ MORE
Updating the Triangle 01-03-2018
Last year, I introduced my big picture framework of assessing the relative attractiveness of markets Inside the Triangle ...READ MORE