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Taper Tan-Trump

Are geopolitical risks beginning to impact stocks? While 2017 was marked by low volatility and little consideration for risk in general, the first quarter of 2018 feels different. 

Posted by Luis Ahn on May 3, 2018 9:32:39 AM

Topics: From the Desk of Luis Ahn, International Equity

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Biologics Outsourcing + Butterscotch Cookies

Imagine you have some great recipes for butterscotch cookies, and you want to start a cookie business. Yet, there are some issues. First, the price people are willing to pay for cookies is going down due to intense competition as well as scrutiny from regulators after a few greedy companies ("cookie monsters," if you will) charged exorbitantly high prices. Second, because of the competition, you'll have to spend more on research to keep your cookie line fresh (pun intended). Finally, building a cookie factory is expensive, takes years to build, and requires following many stringent regulatory standards. The thing is, cookies are still in demand and could even get more popular as better cookie recipes are developed! So what do you do?

Posted by Daeil Cha on Apr 19, 2018 3:48:12 PM

Topics: From the Desk of Daeil Cha, Biotechnology

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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

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Cryptocurrency Hidden Risks: How Embedded Content Could Land You in Jail

Continuing with our explorations of cryptocurrencies and blockchain technologies, we highlight a fascinating risk of supporting a cryptocurrency.

Posted by Harry Polishook on Apr 4, 2018 12:10:42 PM

Topics: From the Desk of Harry Polishook

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Declining Correlations Make Case for Increasing International Equity Allocations (part 2)

Are the benefits of international equity diversification finally returning? From a performance and correlation perspective, it sure seems like a possibility.

Posted by Richard Pell on Mar 27, 2018 10:01:00 AM

Topics: International Equity

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The Larger Theme in Medical Devices is Still to Come

On March 16th, Johnson & Johnson ("JNJ") received a $2.1b offer for its glucose monitoring business ("LifeScan") from private equity firm Platinum Equity. This isn't too surprising since JNJ announced last year it was thinking about selling the business in order to focus on its core segments. The $2.1b enterprise value for LifeScan reflects a 1.4x multiple on trailing 12-months revenue, which compares to the 1.1x multiple that Panasonic paid for Bayer Diabetes, another diabetes diagnostics business. At face value, this seems to suggest the appetite for medical devices continues to recover. Global M&A activity in healthcare products has stabilized and increased steadily since the financial crisis by all measures -- dollar volume, deal count, and average premium paid per target. See the charts below which show annual data; most recent data dips because those represent YTD figures through March 18, 2018. 

Posted by Daeil Cha on Mar 22, 2018 9:24:24 AM

Topics: From the Desk of Daeil Cha, Healthcare

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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

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Is International Equity Outperformance Just Beginning? (part 1)

Are you frustrated with your globally diversified equity exposure? Are you considering reducing your international equity allocation in favor of a more U.S.-centric portfolio? If so, we are here to say hold on! We totally get it, but please consider the following before hitting that sell button:

1.  Returns have begun to favor international equity over U.S. equity.

2.  Low correlations actually signal that now is time to maximize the diversification benefits of international equities.

Posted by Richard Pell on Mar 7, 2018 12:26:39 PM

Topics: International Equity

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What the Moves in the Bond Market Mean for International Equity Investors

The bond markets are seeing a sell-off. Yields on 10-year U.S. Treasuries rose as high as 2.90% in mid-February, compared to the September 2017 low of 2.04%.

Posted by Daeil Cha on Feb 28, 2018 3:18:17 PM

Topics: From the Desk of Daeil Cha, International Equity

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Smart Technology: Inherent Risks of GPS-Enabled Devices

Today, we want to talk a bit about security and technology. The “Internet of Things (IOT)” is a favored buzz word right now in technology and technology investing. This term describes the now nearly ubiquitous internet connected devices, often GPS-enabled. Smart and connected devices today are cheap and readily available, but do people really think about the security implications inherent to them? 

Posted by Harry Polishook on Feb 22, 2018 1:37:59 PM

Topics: From the Desk of Harry Polishook, International Equity

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