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Everyone is talking about Nvidia. Just 2 years ago the stock was worth a mere $400 billion. Now, depending on the time of day, it is worth somewhere around $3 trillion and was briefly the most valuable company in the world. Investors should not overcomplicate things here: Nvidia and the broader AI theme are in the midst of a speculative mania.
Of course, we have been here before. Investment stories, much like the current one, can be intoxicating and lure every last investor into the trade. During such times, diversification seems unnecessary. Who wants it when “one and done” portfolio decisions look so easy? Yet, investors invariably paying heavily for having taken on concentrated risk exposures. The late 1990s are a prime example.
At times like this, it is always useful to revisit the role of the portfolio manager: why do clients pay us to manage their wealth? It is not for flawless clairvoyance. Rather, we are paid to anticipate probable risks, prepare for opportunities and, importantly, not lose our proverbial minds when everyone else has lost theirs.
In the latest podcast, Rob Duncan, Senior Vice President, Portfolio Manager & Lead ESG Officer, sits down with Tyler Mordy, CEO & CIO of Forstrong, to discuss the recent volatility in Nvidia and implications for the broader market.
Global Thinking Podcast
Forstrong Insights
Forstrong Quarterly Rebalance Q3 2024
Ask Forstrong: A Postcard from Mexico
5 Minute Macro: Election Waves and Market Moves
Forstrong Dashboard: Metals Rockin’ Out
Ask Forstrong: Emerging Markets, The Bull is Back
Forstrong Dashboard: Feeling EM Boldened
Ask Forstrong: A Broadening Bull Market?
Forstrong Dashboard: Breaking Breadth
Forstrong 5 Minute Macro: A Broadening Bull Market?
Forstrong Rebalance Summary: Q2 2024
Invest in Forstrong ETFs
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Canadian ETF inflows continued at a brisk pace in May, bringing the year-to-date number to more than $24 billion (handily beating their mutual fund counterparts). Total assets now stand at more than $432 billion with 1407 ETFs to choose from. With all this selection, how do investors know which ETF to buy?
To help answer these questions Rob Duncan, Senior Vice President, Portfolio Manager & Lead ESG Officer at Forstrong, sits down with Patrick McEntyre, Managing Director and Co-Head of Institutional Sales of ETFs at National Bank Financial Group, to discuss:
Key trends within the ETF industry Where investors are allocating funds How changes in ETF flows align with Forstrong’s investment outlook and positioningIn addition, Patrick walks through how National Bank provides liquidity on large trades, when ETFs can be more efficient than stocks and bonds, and why the rush to International and Emerging Market equities might be at a tipping point.
Global Thinking Podcast
Forstrong Insights
Forstrong Dashboard: Metals Rockin’ Out
Ask Forstrong: Emerging Markets, The Bull is Back
Forstrong Dashboard: Feeling EM Boldened
Ask Forstrong: A Broadening Bull Market?
Forstrong Dashboard: Breaking Breadth
Forstrong 5 Minute Macro: A Broadening Bull Market?
Forstrong Rebalance Summary: Q2 2024
Invest in Forstrong ETFs
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Looking back on the month of April, it was a tough time for many investors. Broadly, many stock market sectors broke their winning streak. Bonds didn’t fare any better as continued strong global economic data pressured long-term yields higher.
As the macro regime continues to unfold, Forstrong’s investment team continues to believe the world is transitioning toward an inflationary boom. Increased volatility is a key tenet of this shifting economic landscape. But the theme of broadening performance (away from the handful of US mega-cap stocks which carried markets last year) is alive and well. In April, commodity-sensitive exposures and emerging markets equities staged impressive rallies.
In this episode, Rob sits down with Forstrong Lead PM, David Kletz, to unpack these latest development. They also dive into why an improving outlook in emerging markets could lead to outsized returns this year.
Global Thinking Podcast
Forstrong Insights
Ask Forstrong: A Broadening Bull Market?
Forstrong Dashboard: Breaking Breadth
Forstrong 5 Minute Macro: A Broadening Bull Market?
Forstrong Rebalance Summary: Q2 2024
Invest in Forstrong ETFs
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US equities have taken center stage over the last few years and are touching all-time highs as consumers continue to show strength with healthy balance sheets and less sensitivity to higher interest rates. But is all this good news already priced in?
What may be surprising is that returns are no longer being powered primarily by the “Magnificent 7”. Instead, forgotten and unloved sectors are now witnessing a steady bid.
In this episode Rob sits with BMO’s Chief Investment Officer, Sadiq Adatia, to talk about their recent market outlook and why they believe a broadening market rally is in the cards for 2024. While high quality and financials in the US are in focus, gold and commodity-oriented equities could see a continuation of strength.
Global Thinking Podcast
Forstrong Insights
Ask Forstrong: A Broadening Bull Market?
Forstrong Dashboard: Breaking Breadth
Forstrong 5 Minute Macro: A Broadening Bull Market?
Forstrong Rebalance Summary: Q2 2024
Invest in Forstrong ETFs
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Interest Rate Obsession: Are Markets Missing the Bigger Picture?
Markets have found a new obsession to dote upon: timing central bank rate cutes. Everywhere you look, interest rate expectations continue to dominate headlines and market narratives. Imminent recession fears have been replaced with questions on the timing and magnitude of interest rate cuts, but interest rates are only part of the story. The larger trend is the impressive resilience not only of the US economy but also in other parts of the world.
After pricing in up to 6 rate cuts to start the year investor expectations have quickly scaled back to 3. One could even wonder, are we actually in the “no landing” economy?
In this episode Rob sits down with Forstrong Lead PM, David Kletz, to talk about expectations on rate cuts and the possibility of a “Bull Steepening” on the yield curve. Additionally, they walk through Forstrong’s recent strategy changes and why they see greater opportunity in US mid-caps, Emerging Markets debt and Swedish equities.
For more information on our podcasts please visit: https://forstrong.com/podcast/
Forstrong Dashboard: Breaking Breadth
Ask Forstrong: A Broadening Bull Market?
Forstrong Global Insights
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In this episode Rob sits down with Michael Greenberg, Senior Vice President and Portfolio Manager at Franklin Templeton Investment Solutions, to ask questions about their market outlook and where they see opportunity in the year ahead. Throughout the podcast Mike shares his perspectives on inflation, expectations for interest rate cuts, concentration in US equity’s “AI enablers” and Bitcoin’s impact on portfolio returns. While Mike remains positive on the US avoiding a recession and continued equity performance, he makes an interesting case for opportunities within Emerging Markets. Tune in to hear more.
For more information on our podcasts please visit: https://forstrong.com/podcast/
Bitcoin ETFs: Crypto Moves Further Into The Mainstream
Forstrong Global Insights
Bio: Michael Greenberg is a senior vice president and portfolio manager for Franklin Templeton Investment Solutions and is a member of the Investment Strategy & Research Committee.
Mike specializes in fixed income strategy and has co-portfolio management responsibilities for all Canada-based managed programs, including Franklin Quotential, Franklin LifeSmart Sustainable and Franklin ETF Portfolios. He also manages institutional mandates in North America. Mike holds a bachelor of commerce with honors in marketing and international management from the University of Ottawa. He also holds the Chartered Financial Analyst (CFA) and Chartered Alternative Investment Analyst (CAIA) designations.
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One year ago, market forecasters were in absolute agreement. A Bloomberg consensus survey showed that 100% of the respondents predicted a global recession in 2023. Rising interest rates would surely create an inevitable “hard landing”. When such agreement exists in the investment world one must ask the obvious question, “What don’t we already know?”.
Since then, fears over hard landings have vanished as the powerful surge in US-led growth has thinned out the recession camp. But less discussed is that economic activity outside America has also firmed, led by a liftoff in global trade.
Does this mean that the bull market in US stocks will also start broadening out? We think so. In fact, investor optimism has created bull markets from New York to Tokyo. Japan, France, Canada, Switzerland, Germany, Taiwan, Netherlands, Denmark, Italy, Brazil, and India are in or near bull market territory touching highs last seen in the Post Covid rally.
So, what don’t we already know?
As the Magnificent 7 continue to grab headlines and push prices and valuations to historical highs, opportunities for a follow through trade are all around us. In this episode Rob and Tyler discuss why a broadening rally is so important and how best to position portfolios to profit from this emerging macro trend.
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On this episode Rob sits down with our good friend Rodrigo Gordillo from Resolve Asset Management. Rodrigo has a fascinating background and shares how hyperinflation in 1980s Peru shaped his life and investment philosophy. He also discusses why emerging markets have been more proactive in combating inflation over the last few years, and why inflation volatility will be higher this decade than the last.
For more information on our podcasts please visit: https://forstrong.com/podcast/
Bitcoin ETFs: Crypto Moves Further Into The Mainstream
Forstrong Global Insights
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Welcome back to all our listeners. This is now Season 4 of the Forstrong Global Thinking podcast and there is no shortage of topics to dive into. In this episode Rob sits down with Tyler Mordy, CEO and CIO, to discuss which macro trends are shaping the investment landscape.
Looking back, last year was one of heightened risk aversion: some $1.3 trillion dollars ran into global money market funds. Meanwhile, our investment team has a thesis that may stretch minds: we are entering a new risk-taking cycle based on an entirely different set of macroeconomic conditions and investment leadership. As 2024 progresses, Forstrong forecasts recession fears will again recede, and aggressive rate cut expectations will be unwound.
Tune-in to hear why shifts away from cash will lead to a big rotation into the cheap, cyclically sensitive and inflation hedging assets.
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Forstrong Super Trends - Macronova
Ask Forstrong - Inflation: Mission Accomplished
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The US bond selloff over the last few years is on par with the largest ever in history. In this podcast Rob sits down with Forstrong Lead PM, David Kletz, to discuss market performance and what “higher for longer” interest rates means for investors. While this new environment has dampened confidence and has everyone running into the perceived safety of cash, the reality is that cash rarely outperforms risk assets for extended periods. Meanwhile, several investment opportunities have now become more attractive, given lower valuations, higher yields and — given extremely negative sentiment — the potential for upside surprise to materialize.
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In part 1, Rob Duncan sat down with Reza Samahin, Portfolio Manager at KJ Harrison, to discuss the big ideas behind Artificial Intelligence and what impact it may have on the future
In part 2, Rob and Reza discuss the implications of AI from an investment perspective. Is this Dot Com 2.0? Will investors benefit from an unfolding capex cycle driven by AI? Are valuations on AI-related stocks justifiable?
Tune in as they discuss the next phase of AI and where investors should direct their attention.
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Last month 2,600 tech industry professionals signed a petition led by Elon Musk and Apple co-founder, Steve Wozniak, to halt AI development until there was a clear understanding of its full implications. Although he did not sign the letter, Geoffrey Hinton, the so-called “Godfather of AI”, resigned from Google to warn the world stating, "AI could be a greater threat to humankind than climate change".
In this part 1 of this 2-part series, Rob sits down with Reza Samahin, Portfolio Manager at KJ Harrison, to discuss the big ideas behind artificial intelligence and what impacts it may have for humans overall. Will we all be out of a job? When will it become sentient?
In part 2, Rob will speak with Reza again to discuss the implications of AI from a macro investing perspective.
Reza Samahin, P.Eng, CFA Portfolio Manager Reza Samahin is a Portfolio Manager and a member of the KJH Investment Team. Reza focuses exclusively on investing in global technology companies. Reza has over 20 years combined experience in capital markets and the technology industry. Prior to joining KJ Harrison Investors in 2011, Reza was a Portfolio Manager at Natcan Investment Management Ltd. and Altamira Management Ltd. where he was a Lipper Fund Award recipient in the Technology category. Reza is a Professional Engineer and has held management positions at Amdocs Inc., Algorithmics Ltd. and IBM Labs.Reza received a Bachelor of Applied Science (Engineering Science) from the University of Toronto.
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It has been four long years since Forstrong last visited mainland China. In that time, the country faced a real estate collapse, technology crackdowns and more than 1100 days of brutal lockdowns. Given the size and scale of China’s influence on the global economy, their reopening is something that smart investors need to monitor.
After a month on the mainland Shibo Gu, Forstrong’s Research Analyst, sits down with Rob to talk about his firsthand experiences and Forstrong outlook on the awakening of the world’s second largest economy. Additionally, they discuss whether the recent Alibaba spinoffs are a positive for the sector and which emerging countries are best positioned to benefit from the reopening.
Ask Forstrong: Postcard from China, Part 1
www.forstrong.com
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Coming off a surprisingly resilient Q1, Global Equities staged a rally for a second quarter despite the collapse of Silicon Valley Bank and renewed fears of another 2008 financial crisis. While US markets staged a late rally to pull ahead of Canada, International markets continue to be global leaders. In this episode of Global Thinking, Rob sits down with Forstrong’s Lead PM, David Kletz, to hear about structural changes impacting global markets and why International and Emerging Market equities might have a leg up over their American counterparts. To top it off, David shares some macro insights into Japan and why a rally could be imminent.
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Cette semaine, nous avons un invité très spécial pour notre podcast "Global Thinking". Omar Rayes de Forstrong s'assoit une deuxième fois avec l'Honorable Clément Gignac.
Clément a eu une longue et brillante carrière dans les secteurs public et privé. Sur la scène internationale, il a présidé en 2012 le Conseil de l'agenda mondial sur la compétitivité (division du Forum économique mondial). Il est également membre associé de la Conference of Business Economists, un groupe d'éminents économistes mondiaux basé à Washington, D.C. Il est maintenant membre du Sénat du Canada.
De 2012 jusqu'à sa récente nomination à titre de sénateur indépendant, M. Gignac a occupé le poste d'économiste en chef chez iA Groupe financier. Il était le porte-parole du Groupe sur les questions économiques et présidait le Comité d'Allocation d'Actifs. Avant de se joindre à iA Groupe financier, M. Gignac a travaillé comme économiste et stratège pour de grandes institutions financières, notamment comme économiste en chef pour la Financière Banque Nationale de 2000 à 2008.
Clément est également un ami de longue date de la firme et a travaillé en étroite collaboration avec notre équipe de gestion de placements dans le passé.
Dans cette vidéo, Omar et Clément discutent de la récente hausse des taux de la FED, de l'effondrement de la banque SVB et des principaux facteurs macroéconomiques, notamment l'inflation et la perspective d'une récession.
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This week we have a very special guest for our “Global Thinking” Podcast. Forstrong’s Omar Rayes sits down for a second time with the honorable Clément Gignac.
Clément has had a long and distinguished career in both the public and private sectors. On the international scene, he chaired in 2012 the Global agenda council on competitiveness (a division of the World Economic Forum). He is also an associate member of the Conference of Business Economists, a group of distinguished global economists based in Washington, D.C. He now serves as a member of the Senate of Canada.
From 2012 until his recent nomination as an independent Senator, Mr. Gignac held the position of Chief Economist at iA Financial Group. He was the Group’s spokesperson on economic matters and chaired the Asset Allocation Committee. Prior to joining iA Financial Group, Mr. Gignac worked as an economist and strategist for major financial institutions, including as Chief Economist for National Bank Financial from 2000 to 2008.
Clément is also a long-time friend of the firm and has worked closely with our investment management team in the past.
In this video, Omar and Clément discuss the recent FED rate hike, the collapse of SVB Bank, and key macroeconomic factors including inflation and the prospect for a recession.
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Silicon Valley’s scrappy attitude of “move fast and break things” not only became standard start-up advice over the last decade, but quickly evolved into a global movement for the technology sector.
Yet, a rich irony has emerged. It turns out that customers can also move fast and break things. Last Thursday, depositors at Silicon Valley Bank (SVB) pulled $42 billion and, in a matter of hours on Friday, became the second largest bank failure in US history.
Tune into Forstrong’s latest podcast, where Rob Duncan sits down with Tyler Mordy to discuss the investment implications of these developments, including the following views:
Forstrong’s continuing negative outlook on the technology sector (Super Trend 3: Silicon Valley’s Hangover). Reasons why a wider financial contagion, similar to 2008, is unlikely. Why international assets will benefit from broken structural trendlines. -
It has been a long string of surprises over the last year. The Fed was surprised inflation wasn’t transitory. Investors were surprised to see the fastest rate hikes since the 1980s. Economists are now surprised we aren’t in a recession.
Yet, in our view, the biggest surprise continues to be the resilience of the global economy – despite higher interest rates, economic growth has continued to chug along.
Where to from here? Our investment team continues to believe that this is a very different environment from the 2010s, when the market consistently over-estimated growth and inflation. The 2020s will be exactly the opposite: markets will now consistently underestimate growth and inflation.
In this episode Rob Duncan sits down with Forstrong CIO, Tyler Mordy, to discuss economic resiliency, opportunities in commodity exporting Emerging Markets and the growth boom now starting to unfold in Asia-Pacific.
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As it was in 2022, financial markets had their own Kafkaesque backdrop. Investors did not need to stretch their imaginations: reality did it for them. Supposedly rare events appeared more frequently than ever.
All of this has forged an easy fraternity for those predicting more macro doom. Global pessimism is now higher than ever. Understandably, the pull of this narrative is powerful. Because the most recent threats to civilization were a pandemic and then an unforeseen war, we expect the next one to take the same existential form. But should we? Looking ahead, it should be clear that the last few years have marked a definitive end to the age of economic placidity of the 2010s — a metamorphosis of the macroenvironment. In fact, today’s conditions are barely recognizable from the “new normal” features of sluggish growth and low inflation that dominated the last decade.
To be sure, the coming metamorphosis will be uncomfortable at times. Different conditions will take some adjusting. Yet many macro trends are spring-loaded to last for years. New bull markets are quietly beginning. More than ever, investors need to look out further and lean into long-term secular themes. Wide-angle global perspectives will be crucial to discern the path ahead and set the right investment roadmap.
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It is now abundantly clear that last year was a hinge moment in history. The world of tomorrow will resemble nothing of what we see today.
“All life is a process of breaking down, but the blows that do the dramatic side of the work…don’t show their effect all at once.” Great American author F. Scott Fitzgerald once wrote in an essay for Esquire. The writer was referring to his personal challenges during the mid-1930s. But the observation could have applied to the global economy moving into 2022: we are only getting early glimpses of how transformational the pandemic has been. Full impacts are still to be seen.
In this Part 1 episode Rob sit's down with Tyler to review, and grade the team, on our 2022 Super Trends which were published in December of 2021. Tune in to hear how our views played out during a transformative year and which trends continue to unfold in our Part 2 episode.
Links are below to read the entire article, don't forget to subscribe to Global Thinking podcast and emails.
Forstrong Super Trends 2022: World in Transition
A Pandemic Reboot A Clunk Transition to a Lower Carbon Future China No Longer a Deflationary Force Upon the World Canada: Stuck in the Middle Breaking Up Big Tech Policy Makers Fighting the Last War Global Inflation: The Force Has AwakenedA special thank you to our partners and clients for joining us on this journey. It is a distinct privilege to steward your financial futures.
- Se mer
