Track Record

We don’t have a crystal ball. We focus on things that historically have done an extremely good job at predicting GDP and industrial output nine months forward. We don’t need to be able to predict the future; we need to be able to read the past by finding leading indicators and focus on them when others are fretting about lagging indicators.

As long as we focus on these leading relationships, we feel confident in our forecasts.

A selection of our forecasts from 2008 onwards are outlined below. Please do not hesitate to contact us to discuss in more detail.

2016 Report Excerpt Market Activity


"From September 14th Monthly: central banks are likely to inject liquidity just as the real economy slows. This creates a sweet spot for excess liquidity, which will be supportive for still-depressed commodities. The sweet spot lasts until a growth slowdown becomes severe. This is the experience of the last three recessions in 1991, 2001 and 2008."

The CRB Commodities Index recovered its losses from the June peak and rose 6% into year end.


"From August 30th Tactical: The BoJ is struggling to create the virtuous circle of growth and higher inflation. It will, however, likely succeed in inflating equities. To try to achieve this, more aggressive monetary policy in Japan is looking likely at some point (with perhaps a deflationary shock as the catalyst). Meanwhile, M1 looks like it’s going only one way at the moment, which should be a boost for Japanese equities."

The BoJ announced yield curve control in September and the Nikkei rallied 13% into year end.

JULY 2016

"From July 13th Monthly: As we look around the world today, banks appear to be the most beat up and cheapest sector we can find... While banks may suffer more as curves flatten further and the credit cycle deteriorates, an awful lot of bad news is already priced in."

US Banks rose steadily from July and accelerated after the US election. The S&P 500 Banks index rose 35% from July to year end.

JUNE 2016

"From June 15th Tactical: Our Credit-Volatility Stress Indicator activated today. This indicates that behaviour in US equity markets has likely shifted from risk-on to risk-off. Brexit has clearly influenced the indicator, but we would be remiss if we didn’t point out to our clients one of our most reliable signals for a vulnerable US equity market. "

We did not predict Brexit, but our indicator allowed us to point to the great risk-reward of purchasing "Brexit" hedges even as the cost of these hedges rose in the lead up into the vote.

MAY 2016

"From May 11th Monthly: The surge in Chinese and emerging market liquidity means that the macro picture continues to support emerging market outperformance over DM... We expect this trend to continue for at least the next 3-6 months, as EM money growth surges, while DM money growth remains lacklustre. "

The MSCI EM index rallied by 12% to the end of September, outperforming the MSCI DM index by 8 percentage points.

MARCH 2016

"From March 9th Monthly: Capital flows into the US were the main driver of the dollar rally in 2014. These have begun to turn, and flows to EM are picking back up. This, along with fundamental overvaluation and a dovish Fed, likely means the dollar’s run is over for now, and instead the currency should display a modest weakening bias."

The DXY index fell by another 5% into the beginning of May before stabilising.


"From February 2nd Tactical: The VP Equity Leading Indicator looks at mean-reversion of valuation and technical factors to normalised levels. At present, this is forecasting significant upside for EM and Canadian equities. Given that these were heavily exposed to the commodities complex and were very beaten up, any signs of stabilisation in China (which our leading indicators expect around Q2-Q3 2016 this year) could lead to outsized gains in Canadian equities."

The MSCI EM index rallied 20% over the subsequent 6 month, while the TSX 60 rallied 15%


"From January 5th Tactical: We are seeing signs of stress and strain in money markets and credit spreads that typically have preceded corrections and crashes. Our Crash Signal has triggered, and this means that the chance of a sell-off or crash are very high. It does not mean that a crash is guaranteed, but rather that the probability of a crash has risen significantly."

The market fell almost 8% over the next 2 weeks before eventually bottoming down 10% in mid-February

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