Anyone for Alpha?
Despite unprecedented (and still rising) levels of financial asset price manipulation by central banks since our note on “mindless passive investing” two and half years ago (and its follow-up parable “of elephants and mice”), we feel comforted in our view that going after alpha remains the superior (ex-post and ex-ante) alternative, especially when Butterwire is added to one’s equity research workbench.
When research, data science and technology come together to deliver complex bespoke investment solutions fast and without the need for large budgets.
Down to the Wirecard
If an interesting long idea consists of great-looking fundamentals and a high level of controversy, then Wirecard must have been one of the most interesting large-cap stocks we had seen in a while, if only in Europe. Instead, Wirecard went from nearly 200 euros a share two years ago (when it took Commerzbank’s place in the DAX), to 100 euros when the first scandal erupted in January 2019 (FT report), to 70 Euros last month (after KPMG was unable to verify WDI’s third-party profits), to now insolvent (E&Y not signing off on 2019 accounts and CEO arrested) and the European equivalent to Enron.
Recovery, Upcycle, Emerging Markets… Commodities next?
According to the global macro nowcasting part of Butterwire’s engine, we’ve moved to an economic upcycle phase on June 23, just over 3 weeks after moving into a recovery phase. Market-implied equity returns have shot up past 16% with a strong tilt toward Emerging Markets.