Investment Adviser/Professional Mentor Formerly CIO and Founder of Eclectica Asset Management LLP This account is not actively monitored, to reach Hugh, e-mail team@acid.capital
“…the way I look at it, most days aren’t winning days and life is not always going well, so when it is, I make the most of it, while I can. I’m not a bad loser but I’m a bloody good winner…” Dave Nevison, A Bloody Good Winner, 2007 Am I disheartened? Whilst the stock market has continued to rally - the MSCI World Equity Index rose a further 3.4% in May - the Fund lost 3.9%. Year-to-date we continue to sport an advantage, though diminished, with the fund down 1.8% and the broader stock market down 6.8%. On a rolling 12 month perspective this widens to -2.1% for the fund vs. -10.8% for the broader index. However, I have started receiving hate mail again, a sure sign that our troubles have bottomed. Of course it is tedious for everyone concerned that May should have tracked April so closely: good commodity-facing equity and futures performance undone by the fixed income book. But let me explain why I think you should keep us on your books. There has been carnage in fixed income markets. Rate expectations have risen considerably. Take as an example, the 2 Year Treasury yield. Today it is almost 2 standard deviations above its prevailing trend. At the end of February it was trading more than 3 standard deviations below. And yet everyone appears long risk again. Nevertheless, we continue to survive (though not yet prosper). We believe the notion of the Fed hiking interest rates 3 times this year is preposterous.