• Masters of Long/Short Equity  

    Congratulations to Gary Woodland for winning his first major championship on Sunday. What he showed us on Sunday was nothing short of daring, confident and determined. It was clear from his first tee shot, that Gary was there to WIN, and nothing else was an option. He took a stance, planted his flag firmly in the ground and was committed to his belief in himself. Too often in the investment world, there’s a temptation to chase hot money and we are intimidated to take a stance and plant our flag in the ground.


    2017 has seen equity markets steadily moving higher, volatility remaining at historically low levels, and trend-following managed futures strategies continuing to languish. Amid this backdrop, investors naturally ask if this has created a buying opportunity, with the expectation that markets, volatility, and trend-following should revert to longer-term averages. This is a reasonable question and expectation, but what really matters is whether investors can predict when this long-awaited mean-reversion will occur. Conventional wisdom says they can’t, but according to a recent article at ValueWalk, it appears the author believes timing managed futures allocations may be possible. In a recent whitepaper, they address “some of the potential benefits, challenges and opportunity costs” seen for investors who are “seeking to time managed futures allocations.”


    The Nothing

    September 07, 2017
    Andrea Coleman, CAIA

    One of my favorite movies as a kid was “The NeverEnding Story.”  As a nerdy book reader then (and now, for that matter), I could see myself as Bastien as he immersed himself in the land of Fantasia and Atreyu’s quest to defeat The Nothing—the threat to make everything nonexistent.

    I recently watched it again and it got me thinking about what some of our advisors are currently dealing with.  We are in the eight year of an equity rally that, aside from a few hiccups, has had minimal declines (markets are supposed to have at least one 20% drawdown every four to five years, and domestically we’ve had zero since the bottom in March 2009).


    My hometown has a locally owned pizza place that’s been a staple of the community for almost 40 years; I even worked there for a stint in college. The pizza they serve is pan style and both the dough and sauces are made fresh daily. Even the toppings are scrutinized for freshness throughout the day. The owner’s life has been dedicated to improving the customer’s experience with the quality of their product. For example, as a delivery driver I wasn’t allowed to chew gum, because “the first thing the customer should smell is our pizza, not your gum.” It’s the kind of food that transcends the body’s basic necessity of fuel and feeds your soul, makes you happy, and causes you to pause, if only for a second, to reflect on the complexity of the flavor.