“When it rains outside, normal people don’t go crazy. Rain is a part of life. But when stocks go up and down, people go crazy. They sell when stocks go down. Even though stock volatility is more normal than rain.”
– James Altucher, writer and serial entrepreneur
Nothing is easy
Investing seems more complicated of late:
- Significant capital was misallocated in the build-up to the 2008 crisis.
- Quantitative Easings’ impacts on major economies’ long-term health are unknown.
- Low credit quality of some developed market sovereigns potentially changes the pecking order of credit.
- Emerging markets show growth, but are still dependent on external capital flows, as domestic savings is insufficient.
- Global integration is a fact of the modern corporate world. It is important to understand the interplay between different countries and regions.
What drives us?
We see demand for absolute return strategies as evergreen:
- Traditional thumb rules for investing are challenged in these days.
- Efficient market theory is not true, as there are always stocks which are too high or too low in any market.
- Markets are inefficient as processing of information takes deliberate effort and time.
- Behavioural biases exist in the human beings in the market as shown by empirical data.
- Continuous learning is required to keep abreast of changes, as markets are complex and adaptive.