Cam you were wrong about Europe outperformance relative to US in your prediction for 2013.I am European I know Europe. Don't make mistake of doubling up on your losses.Some of my readers mistake this blog as investment advice. I draw everyone's attention to the disclaimer that is at the bottom of every blog post, which reads in part [emphasis added]:
None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.
What is an investment process?
You shouldn't use this blog for investment advice. Let me explain. Most investment processes consist of at least the following three steps:
- Decide on what to buy and sell.
- Decide on how much to buy and sell.
- Timing the trade.
I write this blog as my way of thinking out loud and inviting feedback. Most of what I write relates to step 1. There is little or no discussion of steps 2 or 3. Even if we both agreed that security XYZ is a good idea, I have no idea about your circumstances or your portfolio. I can't tell you how much to buy or whether it is appropriate for you at all.
Moreover, if I advocate entering a position, don't be assured that I will write about my decision to exit the position. Consider this post where I wrote in early December about the market leadership of European stocks and homebuilders (see Some surprising market leaders). Even though I had identified European stocks as market leaders, it didn't mean that I don't have a risk control discipline. The chart below shows the relative performance of the ETFs for Euro STOXX 60 (FEZ) against MSCI All-Country World Index (ACWI):
When the relative trend break occurred in early February, we were out of the trade. I didn't write about it on this blog, nor did I feel any obligation to write about it on this blog.
You can see a similar pattern in the homebuilders of when we exited the position at the relative trend break.
You get what you pay for
The best way to use the content in this investment blog as a source for ideas. But understand that you get what you pay for - and it's not investment advice.
If you do want investment advice, then I need to have an up close and personal relationship with you, where I am getting paid a fee. If you believe, for example, that the fund that I manage is appropriate for you, then I will undergo the four steps that I outlined above.
Otherwise, use my ideas at your own peril.
Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.
None of the information or opinions expressed in this blog constitutes a solicitation for the purchase or sale of any security or other instrument. Nothing in this article constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Any purchase or sale activity in any securities or other instrument should be based upon your own analysis and conclusions. Past performance is not indicative of future results. Either Qwest or Mr. Hui may hold or control long or short positions in the securities or instruments mentioned.
9 comments:
Thanks for making your thoughts on markets available. The limitations you outline are those that must apply on all blogs.
I would be interested in what you think about the possibility of deflation occuring in the US - i.e. a substantial and prolonged increase in the value of the USD - counter-intuitive, which surely must appeal ;-)
Regards
Malcolm
Well explained!
peril? What a strage word to use in relation to your investment ideas.
IF this is how you feel, then why not just completely take the blog down and stop writing.
Cam, I always get fantastic value for money from your humble musings ;).
You're one of my few must read blogs.
Highlighting buy opportunities for further research is more than enough.
Thanks - Dean
Thanks for your blog and keep the good info coming.
Well written. This is a very helpful blog; but only if complemented with hours of intellectual effort and research.
You mention healthcare as a defensive sector. And shorter term (say one or a few years) it probably is, resp. will remain.
However longer term there are some trends (social economic and political ones not market (yet)) that are a bit worrying for the sector.
-at some points gov. deficits will have to be cut;
-global growth probably medium and shorter term slower than expected;
-however there is clearly an aging issue (which works the other way around).
On the back of that healthcare especially in the US looks one of the sectors that could be hit the hardest as the costs related to that rise completely unsustainably and a lot comes from the central pot (budget). Also in Europe where spending have gone crazy and healthcare is rising enormously as well because of aging.
The rest of the world is probably a growth market with rising standards of living but need a different businessmodel because of say legal and illegal copying and demand for several levels of healthcare and because of rising standards of living adjustments because of that. Probably something we wil see longer term in the Western world as well (lower budget healthcare alternative to keep it affordable, but less split as in say Asia).
Anyway I got the impression that at one time we will be hit by necessary austerity (no way (printing) out at that time) and that that will mean a huge drop in centralised healthcare spending one way or another.
With some companies ready for it and present in growth markets and others simply not and getting hit hard. Not this time likely healthcare is a sensitive political issue, but when the money dries out 'The Emperor Loses His Right'.
Dear Cam
I apologise if I was over zealous in my criticism of your long Europe call . It was not meant to be so . I think your analysis of US markets is excellent . Euro area is different and several european countries are in long term bear markets. The bank stress tests are not to be believed new shocks are on the way firstly in Ireland which will trigger ripple effect. People bought euro like they were buying DM . Euro never will be DM . I sincerely respect your analysis
Many people also buy gold simply because they really like the feeling of holding them, especially gold bars because they represents wealth.
US Gold Bureau
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