Flagship Asset Management

There have already been quite large market moves as Trump secures the Presidency, the Republicans, the Senate, and it's looking like a clean sweep for the House as well. We have noted these initial market reactions with interest: * US 10-year Treasury yields are up, bond prices are down, * The Japanese 10-year yield is up, * SA 10-years are up marginally, * The ZAR is weaker vs the US$, * Gold, Palladium and Oil are all down, * Chinese equities and the Hang Seng also down. With this volatility comes opportunity for a boutique manager that can act nimbly and decisively.  

If you are interested in getting to know the face behind the name, meet Gerhard J., and follow his journey from student to global equity analyst. #MeetTheFAM

Billionaire hedge fund manager Paul Tudor Jones is raising alarms about the U.S. government’s current fiscal deficit and the increased spending promised by both presidential candidates, as per his interview with CNBC last week. “We are going to be broke really quickly unless we get serious about dealing with our spending issues,” Jones told CNBC. The founder and chief investment officer of Tudor Investment said he was worried that government spending could cause a big sell-off in the bond market, spiking interest rates. He is also still concerned about inflation. We have been highlighting these issues since Philip Short's June presentation at Meet the Managers, which was all about the US debt burden. If you haven't read his latest article, listen to Philip's interview with Jeremy Maggs, for a quick update on why this is a cause for concern, embedded in the link.

Every now and then, it's good to recall what your goals are and how you are going to achieve them. JD Hayward, CFA gets to the heart of what we do at Flagship.

The US elections are 10 days away... While there is a lot of conjecture around industry winners and losers, depending on whether Trump or Harris is elected, predicting what markets will do is a difficult task. The one top-down factor that is largely known, but perhaps not fully appreciated, according to Philip Short, is that the fiscal position of the US is unsustainable, and the trajectory is going in the wrong direction, regardless of who comes into office. #investmentmanagement #wealth #elections #globalinvesting

Gold hit a record high of $2,750 today. While many commentators are pointing to current tensions in the Middle East as the main driver of gold’s move higher, we disagree. Although it doesn’t hurt. We previously pointed out that gold’s relationship with real rates (which dislocated in Q1 ’22 when the US and the West froze Russian reserves in retaliation of the Ukraine invasion), showed that although the US is always able to pay its US Dollar debt, it wasn’t always willing. The US froze Russia’s US debt holdings. That move coincided with the Global South countries (e.g. China, Saudia Arabia, Brazil) selling US Treasuries and global central banks doubling up on the gold bullion purchases. Yesterday, the UK and EU went one step further and distributed these frozen Russian foreign reserves as aid to Ukraine. Take a look at our article published on 2 August, which explains this phenomenon in more detail. #globalinvesting #investmentmanagement #wealth #gold

The relentless media coverage of all things AI (artificial intelligence), Chat GPT and other developments might make one feel that the hype is overblown. There is, however, more to it than meets the eye...

While most global equity markets delivered strong results during Q3 '24, there was a clear rotation in the US, as the tech-heavy Nasdaq was a relative underperformer compared to the small-cap Russell 2000 index, which gained over 9%. The S&P 500 gained 6% during the quarter, putting its year-to-date return at an incredible 22%, making it the index’s best combined Q1-Q3 performance since 1997. The MSCI World Index is currently trading at a 12-month forward PE of 19.0x versus its long-term average of 15.1x. Such strong returns, together with conflicting economic indicators, lead us to believe that the US is flirting with a recession.  Identifying those indices and equities that could outperform in a market where most asset classes have correlated toward extreme peak valuation levels – in an environment wrought with geopolitical, election, monetary, and fiscal risk – creates an exciting and opportunistic challenge for Flagship’s Global team. Read our thoughts on global market strategy as we reveal the unseen players behind the AI revolution and our new stock idea, Dominion Energy, in our latest Telescope. #investments #globalinvesting #moneymanagement #investmentmanagement #wealth

Flagship proudly celebrated CFA Society South Africa's Day of the Girl initiative by hosting five engaging young women from Vista High last week. From their participation in our morning meeting to the sharing of personal career stories by our dealer, Kate Bottome, and our client specialist, Candice Scholtz, the day was highlighted by the laughter and curiosity of these learners. Thank you to CFA Society South Africa and Vista High School for being part of this inspirational initiative to drive change in the lives of young South African women. #cfadayofthegirl #investinginthefuture #futureleaders #internationaldayofthegirl #cfa #WomaninFinance

What Opec+ production cuts have failed to do for the oil price, the Israel-Hamas war may yet achieve. Oil is on course for a second weekly gain as Israel readies plans to retaliate against Iran. Netanyahu’s security cabinet met on Thursday to discuss how and when the country was going to respond to Iran’s recent missile attack. Two weeks ago, Saudi Arabia intimated its intention to remove their unofficial target price of $100 a barrel for brent crude, likely to be achieved by increasing their oil output in-line with the plan commencing on the 1st of December.   This approach is contrary to Saudi Arabia’s recent strategy of cutting oil output in an attempt to maintain a high oil price. However, the policy has not been as impactful as intended, as oil demand was met by an increase in supply from non-Opec members, as well as a weak Chinese economy dampening demand. But the major reason for recent low oil prices is due to several Opec+ members who did not comply with their production limits. By exceeding quotas, they contributed to an increased supply of oil, keeping the price fairly muted.   The announcement to abandon the $100 crude target contributed to a fall in the oil price and impacted oil companies. In the US, brent crude decreased 3.5% and settled at $70.87 on the day. The US benchmark fell 3.8% to $67.06. Europe’s oil companies were not spared; Shell fell 5%, bp fell 4.1% and TotalEnergies was down 3.3%. However, the oil price has since reached $80 a barrel on Monday, and is still hovering around the $80 mark, more likely as a result of the escalating tension in the Middle East. What will happen to the oil price if China recovers due to the recent 200 billion yuan stimulus package? #investments #investmentmanagement #wealth #globalinvesting #oil