Matterhorn, Switzerland

Luis Ahn

Recent Posts

Oil Inventories Just Did Something Not Seen Since 1996

One of the more interesting developments in the oil markets is the fact that oil inventories have not had their seasonal build. We don’t blame you for not noticing. This news was likely drowned out by all the macro “noise” around trade wars, flattening of yield curves, rise in inflation, tax reform, new Fed Chair (hawkish or dovish?), spike in VIX, and volatility in FANG stocks. Admittedly, there is a lot of macro news to digest.

Posted by Luis Ahn on Apr 11, 2018 8:34:50 AM

Topics: oil, From the Desk of Luis Ahn, International Equity

Read More

The Impossibly Hard to Predict Equity Market Correction

After equity markets hit all-time highs earlier this year, market pundits have been eager to “call the top.” We have one of the largest hedge funds in the world taking on significant short positions in the European market, an equity strategist at a bulge bracket firm calling for a potential 40% market correction “at some point” and a recent article claiming that high cross-asset correlation is a sign of an impending sharp correction. These headlines have analysts all asking the same question: should we brace for a big sell-off?

Posted by Luis Ahn on Mar 15, 2018 11:38:01 AM

Topics: From the Desk of Luis Ahn, International Equity

Read More

Return of the Old Economy?

One of the most interesting observations of the recent market pullback (notwithstanding the spectacular collapse of volatility ETPs) is that some of the sectors we would have expected to outperform did poorly, and vice versa (see below). In a down market, we would have expected Materials, Industrials and Consumer Discretionary to be amongst the underperforming sectors; Utilities, Telecom and Healthcare to be outperforming. Even though some of the sector performances can be explained by specific reasoning (ex: expected rise in interest rates depressed Utilities), the pullback seems to actually broadly favor cyclicals. In hindsight, this could make sense as economies globally seem to be gaining steam, and the latest macroeconomic data suggest they are not slowing down anytime soon.

Posted by Luis Ahn on Feb 15, 2018 6:38:17 AM

Topics: International Equity

Read More

Oil: Don’t hold your breath on rig counts

In June 2017 we wrote about oil prices being likely too low; a lot has changed since then. With WTI now at over $60 per barrel (and Brent almost $70 per barrel), market participants are wondering how much higher we can go, or worse yet when prices will revert. One ‘signpost’ analysts quote very often is the (Baker Hughes) U.S. oil rig count, which is published on a weekly basis on Fridays. The logic is that if oil prices get too high, rig count will rise, production will grow, and prices will be depressed. Conversely, if rig counts stay flat or drift lower, oil prices will continue to grind higher.

Posted by Luis Ahn on Jan 24, 2018 6:15:36 PM

Topics: oil, From the Desk of Luis Ahn

Read More

Mercedes to Tesla: Can I Borrow Your Electric Car?

Earlier this year the international equity team at R Squared Capital Management wrote a blog about the potential winners and losers in the electric car race. There’s been some recent news that adds some fun color to that debate.

Posted by Luis Ahn on Dec 20, 2017 7:40:00 AM

Topics: From the Desk of Luis Ahn, Electric Cars

Read More

“Gotta See it to Believe it”

Nothing seems to faze the market. Regardless of which market or asset class, the price appreciation continues with little regard for risk.For investors and asset allocators who are actually focused on risk management, this environment can be maddening. When a bull market, like the current one,subscribes to the belief that nothing materially negative can happen, it is abundantly clear that risk is being ignored.Below, we feature three different asset classes – Bitcoin, South Korean equities and U.S. volatility – as case examples. These are not meant to imply that markets will correct or that investors should be fearful. Rather, we highlight these extreme levels of complacency so that RIAs and other asset allocators will proactively analyze the risks hidden within their portfolios. Now is not the time to be lulled to sleep. 

Posted by Luis Ahn on Dec 13, 2017 5:21:58 PM

Topics: From the Desk of Luis Ahn

Read More

Supercharging Electric Vehicle Uptake

At the end of last month, we wrote a blog about the global shift to electric vehicles (EV). In this R Squared Capital Management blog, we’ll take a closer look at battery costs, EV adoption rates, and emerging battery technologies.

According to a 2016 survey by Japan’s Ministry of Economy, Trade and Industry (METI), the three most important impediments to buying an EV were battery-related: 

Posted by Luis Ahn on Oct 18, 2017 2:22:53 PM

Topics: From the Desk of Luis Ahn, Electric Cars

Read More

The Global Shift to Electric Vehicles

While many have eagerly followed Tesla’s progress in the electric vehicle (EV) market for years now—and if you haven’t, check out TSLA’s stock, which has increased 10x over the past 5 years—governments and industry alike are piling into the space. 

Posted by Luis Ahn on Sep 27, 2017 10:40:34 PM

Topics: From the Desk of Luis Ahn, Electric Cars

Read More

Complacency in the Equity Markets Amid Geopolitical Tensions

Many articles discuss the complacency in the equity markets. Whether it be high Shiller PE/CAPE ratios, historically low VIX levels, or simply equity indices globally trading at all-time highs, signs of “stretched” market valuations are creeping everywhere. Indeed, many investment managers/commentators are keen to point out such market indicators and warn investors of increasing signs of risks. While each of those indicators deserves its own blog thread, we wanted to augment the discussion by pointing out something more subtle happening in the international equity markets, particularly in South Korea.

Posted by Luis Ahn on Aug 10, 2017 12:48:01 PM

Topics: From the Desk of Luis Ahn

Read More

An Inflection Point in Oil Prices: Are We There Yet?

Oil prices have been testing oil bulls over the past few months. After the Organization of the Petroleum Exporting Countries (OPEC) announced in November 2016 that it would cut production, there was an initial rally to the low $50s. Oil prices have now steadied lower due to supply growth from the U.S., Nigeria, and Libya—the latter two OPEC countries were exempt from production cuts. 

Posted by Luis Ahn on Jun 22, 2017 4:13:30 PM

Topics: From the Desk of Luis Ahn

Read More
Comments Welcome