OUTLOOK 2010

Cause & FX

The decade closed with significant turbulence and change. 2010 will be a transition year, leading to positive change and investment opportunity. We believe the major drivers of the next decade will be State Capitalism, Technology Convergence and Asia Brands.

2009 - The Upside of Down

Last year the fundamentals were easy, emotionally it was devastating. Our message was positive: the bottom was at hand and upside was in order. This came through in spades.

The Past Decade

Our investment discipline and identification of key themes led to significant outperformance.

The Next Decade Cause & FX

In the next decade, Strategic State Capitalism, Technology Convergence and Asia Brands will have the most profound FX on economic systems. Demographic realities suggest structural investment shifts will occur.

Strategic State Capitalism

We identified the inflexion point of State Capitalism in 2008 - easy monetary policy fostered financial innovation at the expense of future sustainability. The next decade will see a pronounced shift as strategic stimulus programs set the stage for getting the most out of the resources we have (or will replace). This will be in two forms: stick and carrot.

Technology Convergence

Significant change happens amidst crisis, not the status quo. Demographic realities suggest crisis ahead. However, we believe technology convergence will lead our way out.

Meet Carol

At 79, Carol lives in the house she raised her family in. Technology viewed as games & gadgets have been transformed into game changers.

Asia Brands

The Asian trading bloc will assert itself. These names will enter the portfolio, and you may see a few around - Want Want anyone?

2010 Tactics

2010 is a year of transition. Increase margin of safety through virtual bonds and a bias to value and quality of earnings. Seek exposure to lower risk geographies through currencies and yield.