📑 Research Notes for 2021-11-22
This week we look at the developments occurring under the new all-time highs, the fair value of the 10-year treasury, the investor exodus from China to India, and the variants of capitalism.
We conduct extensive investment research and share the most interesting content that we come across every week. Here is a curated list of this week’s top observations.
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New All-Time Highs.
(All Star Charts)
It’s still not all that pretty out there underneath the surface. But new all-time highs in the S&P500 is probably not something we should ignore. History has taught us that when we see that, there are usually more new all-time highs coming shortly after that. And then after that again….
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10-Year Treasury Yield ‘Fair Value’ Estimate.
(The Capital Speculator)
Meanwhile, the fair value estimate of the 10-year rate continues to signal a case for a higher yield. The median estimate for October is 2.07%, comfortably above last month’s 1.58% market rate (based on the average for October). The 49-basis-point spread in favor of the mean estimate suggests that the market is modestly underpricing the 10-year rate and so, in theory, there’s pressure for repricing closer to 2%-plus.
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Investors Pivot to India After China’s Tech Crackdown.
(Financial Times)
India, long a promising but second choice Asian market for investors, has emerged as a leading beneficiary of the divergence in fortunes between the tech sectors in the two countries. This, along with ample global liquidity and rapid internet adoption, has fuelled a private- and public-market bull run in India.
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Modern Variants of Capitalism, Part 1: Classical Capitalism and Shareholder Capitalism.
(CFA Institute)
Capitalism is the economic system most advanced nations have adopted to foster growth and prosperity. Its Marxian definition, describing the principles of wealth accumulation through the appropriation of profits, certainly has many flavors. But all imply that private ownership and free enterprise are key inputs.
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Curated by Joseph Lu, CFA®
Joseph has over a decade of experience as an investment professional, primarily in quantitative analysis and portfolio management roles. He is the founder and managing director of Conscious Capital Advisors and a CFA® Charterholder. The CFA charter is a globally respected, graduate-level investment credential by the CFA Institute, a global association of more than 90,000 investment professionals working in over 133 countries.
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