Trickle down Trump leads to Trumped up markets

Garry Laurence

What an eventful quarter we have seen in equity markets. The election of Donald Trump has seen a significant rise in long term bond yields and a rotation out of bond proxies like utilities, real estate and consumer staples into sectors like financials that have been undervalued for quite some time. As contrarian investors, we have been positioned in these unloved stocks and sectors waiting patiently for this normalisation to occur. It's often hard to spot the catalyst which will re-rate your investments to what you think they are worth. I surely didn't expect Donald Trump to be the catalyst that would re-rate Bank of America to a more fair valuation but he has been that such catalyst with the stock rallying from $16 to $20 in the past month, along with other US financials. In our current newsletter we talk through our observations of winners and losers and discuss my most recent trip to Asia and Macau. (VIEW LINK)


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