Season Investments

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INSIGHTS

Is Diversification Dead?

Posted on Apr 23, 2013

True diversification is achieved by owning investments across multiple asset classes with low correlation to one another, but that hasn't worked over the past 18 months with stocks being "the only game in town." Is diversification dead or will "the knife cut both ways" for this style of investing?

Will Gold Glitter Again?

Posted on Apr 16, 2013

It would be an understatement to say that the gold market has struggled as of late. Friday and Monday’s two-day decline of -13.7% represented the worst two-day drop since 1980. But have the fundamentals for gold really changed that quickly or is something else driving the price movement?

Bitcoin: Confidence Game or Currency Revolution?

Posted on Apr 9, 2013

With all the heavy handed intervention by central banks, some have begun to question the utility of fiat currencies. This has given rise to new alternative currencies including the completely digital bitcoin.

The Hedge That Wasn't

Posted on Mar 26, 2013

Back in June of last year we first wrote about the concept of Antifragility and a promising new exchange traded product that had the potential to deliver antifragile returns. Since writing that first post we believe certain dynamics have shifted in the market, and as a result we no longer use the product for hedging purposes in our portfolios.

Recipe For A Bank Run

Posted on Mar 19, 2013

Cyprus is making front page news due to some radical terms which the Troika proposed for a bailout of their banking system. Although the initial proposal has been shot down, the damage to the European banking system may have already been done.

An Emerging Dichotomy

Posted on Mar 12, 2013

Since the financial crisis the reasons for favoring EM have changed. In a world where most developed countries are struggling under the weight of excessive debt and lackluster economic growth, emerging economies stand out as a diamond in the rough, but strong economic fundamentals have not translated into outperformance for EM equities.

Workers on Welfare

Posted on Mar 5, 2013

Two weeks ago we unpacked the issue of The Growth Recession, in which we cited productivity growth as one of many possible answers to the question of where all the jobs have gone. Today we ask a different question: where have all the workers gone?

A Golden Life Raft

Posted on Feb 26, 2013

The price of gold is reflecting the tug of war between near-term expectations of a global recovery and long-term inflation risks. As the old saying goes, “gold is no one’s liability” which makes it the perfect life raft for investors with a long-term perspective faced with a global economy that is drowning in debt.

The Growth Recession

Posted on Feb 19, 2013

Although the stock market and the economy bottomed around the same time, the speed of the recovery in these two markets has been quite different. How has the stock market rebounded so well while the economy is still nowhere near the level it was at before the crisis?

Achieving Real Diversification

Posted on Feb 12, 2013

The foundational principal of Diversification 2.0 is finding and investing in assets with low correlation to each other. A portfolio consisting of highly correlated investments is nothing more than a one directional bet on the future. The portfolio will do well in one particular environment but is exposed to a great number of risks if the world doesn't unfold as expected.

Taking the Tide at the Flood

Posted on Feb 5, 2013

There is a bull market in uncertainty that is unsettling for many but also creates opportunity for those willing to take the tide at the flood. This uncertainty is not unfounded, but it might be overpriced. Part of our job is to find the best way to take advantage of the “flood” in uncertainty.

Buying A Four-Letter Word

Posted on Jan 29, 2013

We added AAPL to our watch list when it broke below $550 in November, and we purchased the stock yesterday in our client portfolios at roughly $451/share. We’ll spare you the technical details as there is no shortage of hyper-granular analysis available on the web, but here are a handful of high-level reasons for our decision.