Wednesday, March 30, 2016

Updates on the Brexit, energy and SPX trades

Mid-week market update: Rather than the usual mid-week market technical comment, I thought that I would present updates on a number of trades that I had suggested in the past:
In addition, Tadas Viskanta at Abnormal Returns made a compilation of blogger wisdom about smart beta, which includes my contribution (see The dirty little secret behind smart beta investing). There's lots of good stuff there. The consensus seems to be that while smart beta funds and ETFs have their uses, they are no magic bullets and investors have to understand exactly what they're getting into when they buy.

The full post can be found at our new site here.

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1 comment:

Rik said...

An essential issue you underestimate imho is that the Brexit discussion has largely become emotional iso rational. And in an emotional discussion unsympathetic parties (like the EU is largely seen in the UK) always have a considerable disadvantage. Anyway polls are showing results 10-15 sigma apart so are largely useless as we donot know which ones are more or less correct. Probably best to go for 50/50 now. My instict as yours says that likely people will vote for the devil they know, however the Scottish referendum where the case for remain could rationally be explained (from an economic perspective) almost had 50% Outs, or just needed a few percents more for out to break up the country.

The financial markets have basically only focussed on the small UK leaving the big EU. That made the market reactions we have seen totally logical. However as we have seen with the Euro a possible break up could also be seen as the beginning of the end of the EU. With as such much larger consequences for especially EZ countries than in case of a Brexit for the UK. Imho marketsentiment will be extremely important. In other words another Euro (sub-)crisis at that time might give 180 degree different outcomes.