This year marks five years since we outlined some long-term trends we felt would present attractive investment opportunities. Contrarian and thought-provoking at the time, we found success in setting our sights out five to ten years. It is in the spirit of this process that in 2008 we recall what we said in 2003 and ask, is it Just the Beginning?
Welcome to our fourth annual Outlook edition of Portfolio Strategist.
Last year in Get Réal we retired global rebalancing as a theme and moved to a Global Community stance, emphasising Brazil as a microcosm of it. In 2006, Current Seas, we told you of anticipated inclement weather and how we would tack! more often to take advantage of investment opportunities. In 2005, Loonie Tune, Global Dance focused on the impact of Canadian Dollar strength on global returns and reiterated our views on global rebalancing.
Just the Beginning?
It is time to recall what we said five years ago and ask, is it Just the Beginning? Our assessment is that there is a groundswell afoot that will result in changed attitudes - toward saving, toward governing, toward economic cooperation, toward the benefits of globalisation. This will result in numerous investment opportunities led by an exclusive group of Global Stars.
2007 - Year of the Loonie
We beat the average global manager on better stock selection, though currency took a bite. Loonie-watching can now be done with the naked eye instead of with high-powered binoculars.
In 2003 We Said...
In 2003, we identified several major trends when they were just beginning - China as global leader of economic growth, global rebalancing, a weaker US dollar, and commodities. What investment themes are at Just the Beginning?
Just the Beginning of Changing Attitudes
From Governments to the economic G's, to individuals, to corporations, we think the road ahead points to a change in attitudes. These attitudinal shifts will be broadly felt in the Global Community; fusing political decisions with business profits, economic development with consumer choice, environmental consciousness with sustainable economic growth.
Just the Beginning of State Capitalism
This currently has many forms, yet thinking about it provides an excellent framework from which to identify risks and opportunities. Trade surpluses have created enormous pools of capital, whose managers are only just beginning to invest in. Will this lead to a more passive or activist shareholder? Will it increase bureaucratic red-tape or stabilise economic relationships? Will it level the playing field or divide economies across nationalised industries? The very fact that so many questions remain unanswered confirms this is Just the Beginning.
Just the Beginning of the Emergence of Global Stars
Those companies best positioned to reap the rewards of what the Global Community has to offer will be the winners. To be considered a Star you must have certain characteristics.
Just the Beginning of Globalisation
The result of these ‘Beginnings' will be true Globalization - a world of sustainable economic growth shared more equally among traditional and emerging economic superpowers. Our investment strategies will, therefore, emphasise Global Stars best positioned to benefit.