High Conviction Concentrated Growth Investing, Fallacy Alarm

Fallacy Alarm

High Conviction Concentrated Growth Investing

High conviction concentrated growth investing. Blends single stock, macro and thematic research into powerful long and short ideas. I am convinced that a robust and comprehensive investment process requires macro and micro considerations. And it requires a deep understanding what you are looking for and what you are invested in. Digitization has changed the dynamics both how businesses operate and how investors compete for returns. Ideas can scale much faster and fail much faster than before. The biggest value creation happens before it can be spotted in financial statements. As a result, my approach can be best summarized as high conviction, high concentration growth investing, embedded into a macro framework built on the realization that our current demographic set-up, monetary paradigm and innovation cycle will likely deliver a strong decade for nominal and real returns of productive assets.

Equity Bottom-Up

iShares 20+ Year Treasury Bond ETF / Equity Bottom-Up

<ul><li>For me, the most unexpected aspect of recent events has been that both bonds and stocks moved up together.</li><li>My expectation for this year was that equities do well.</li><li>But I thought they would eventually shake off bonds. Economic resilience (or in fact acceleration) would then force bond investors to chase equities. </li></ul>

For me, the most unexpected aspect of recent events has been that both bonds and stocks moved up together.My expectation for this year was that equities do well.But I thought they would eventually shake off bonds. Economic resilience (or in fact acceleration) would then force bond investors to chase equities. 

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>
Global Liquidity Cycle hit a low in September 2022. It has been rising slowly since and looks set to hit a peak around 2026. Risk assets should get greater support</li>
<li>Yet the large 'carry' on government bonds and the recent sell-off persuades us to allocate towards fixed income for the first time in two years</li>
<li>There are risks. With coupon issuance is set to soar, Central Banks will be increasingly asked to finance monetary inflation
</li>
</ul>



Global Liquidity Cycle hit a low in September 2022. It has been rising slowly since and looks set to hit a peak around 2026. Risk assets should get greater support
Yet the large 'carry' on government bonds and the recent sell-off persuades us to allocate towards fixed income for the first time in two years
There are risks. With coupon issuance is set to soar, Central Banks will be increasingly asked to finance monetary inflation



<ul>
<li>The sell-off in government bonds could have further to go. US Treasury 10-year yields could test 5%</li>
<li>This fall in the value of prized collateral threatens to undermine the entire financial system, hit Global Liquidity hard and damage equities</li>
<li>Threat is most visible in very depressed levels of US bond term premia. Watch the slated step-up in Treasury coupon issuance and likely decline in foreign buying of US debt </li>
</ul>


The sell-off in government bonds could have further to go. US Treasury 10-year yields could test 5%
This fall in the value of prized collateral threatens to undermine the entire financial system, hit Global Liquidity hard and damage equities
Threat is most visible in very depressed levels of US bond term premia. Watch the slated step-up in Treasury coupon issuance and likely decline in foreign buying of US debt 


It's A Duration Crisis, Not (Yet) A Credit Crisis… Bonds, Not Banks Look Dangerous

<ul>
<li>
Global Liquidity has been a key driver of risk assets, but it is starting to skid lower</li>
<li>Problem is NOT tightening of liquidity by Central Banks, rather Collateral pools are wobbling in wake of Japan’s YCC change
</li>
<li>
US Treasury markets face growing challenge from domestic coupon calendar, Fitch downgrade and threat from proposed gold-backed BRICS currency</li>
</ul>



Global Liquidity has been a key driver of risk assets, but it is starting to skid lower
Problem is NOT tightening of liquidity by Central Banks, rather Collateral pools are wobbling in wake of Japan’s YCC change


US Treasury markets face growing challenge from domestic coupon calendar, Fitch downgrade and threat from proposed gold-backed BRICS currency


Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

<ul>
<li>A monthly review of how the markets and our themes are currently performing</li>
<li>Analysing what went wrong and what went right in stocks and sectors</li>
<li>Highlighting positions added or removed from the thematic investment portfolio</li>
</ul>


A monthly review of how the markets and our themes are currently performing
Analysing what went wrong and what went right in stocks and sectors
Highlighting positions added or removed from the thematic investment portfolio


April Themes and Thematic Portfolio Review

United States

iShares 20+ Year Treasury Bond ETF is an exchange-traded fund incorporated in the USA.  The ETF seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than twenty years. 

iShares 20+ Year Treasury Bond ETF (TLT US)

iShares 20+ Year Treasury Bond ETF (TLT US)

A closer look at stock bond correlation

For me, the most unexpected aspect of recent events has been that both bonds and stocks moved up together. My expectation for this year was that...

Fallacy Alarm

Global Liquidity: Looking Towards 2024

The upbeat narrative continues. Worth re-exploring why Global Liquidity, which has been the main driver of markets in recent years, is set to...

Michael J. Howell

It's A Duration Crisis, Not (Yet) A Credit Crisis… Bonds, Not Banks Look Dangerous

This is not a credit crisis involving private debt, but a duration crisis affecting public debt. The entire base of the financial system and the...

Michael J. Howell

Could Global Liquidity Skid Lower?

Global Liquidity the key driver of risk assets is skidding, NOT from tightening of liquidity by Central Banks, rather Collateral pools are wobbling...

Michael J. Howell

April Themes and Thematic Portfolio Review

We review overall market performance, our investment themes, highlighting additions and substractions in the thematic portfolio.

Rikki Malik