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In The Flow

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In the Flow – You Are Here (March 2019)

March 11, 2019

Where are we in March, 2019? We’re seeing a resurgence in the narrative and policies associated with a good old fashioned beggar-thy-neighbor currency competition.

Also, here’s our summary of where we think we are in each of the five evergreen macro issues of markets – inflation, central banks, trade and tariffs, US fiscal policy, and the credit cycle.

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In the Flow – Why Your Long-Vol Allocation Isn’t Working

March 4, 2019

It’s not impossible for market volatility to spike massively through some deflationary shock to the financial system like a China-driven credit crisis or an Italy-driven euro crisis. What’s impossible is TO GET PAID for taking out an insurance policy against the last war.

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In the Flow – It’s the Multiple, Stupid

February 25, 2019

Whether it’s ITT and Hal Geneen, or Teledyne and Henry Singleton, or GE and Jeff Immelt, or Berkshire Hathaway and Warren Buffett … at some point these companies get too big to continue growing through acquisition. There’s no more step-function P/E growth to be had on the E side of the equation. So they ALWAYS start focusing on the P side – the multiple – which is entirely a creature of narrative.

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Narrative Monitors

ET Pro Inflation Monitor

Weimar

We track the prevalence and attention of inflation topics in financial and broadly circulated news sources, including their attachment to narratives around financial markets.

Updated through February 28, 2019. Updated monthly.

ET Central Bank Omnipotence Monitor

Central Bank Omnipotence

We track the prevalence and attention of credibility attached by a wide variety of news sources to central banks and their influence on participants in financial markets.

Updated through February 28, 2019. Updated monthly.

ET Trade and Tariffs Monitor

Trade

We track the attention paid to and sentiment of a various trade and tariff-related topics in a range of news sources, especially with respect to their attachment to financial market narratives.

Updated through February 28, 2019. Updated monthly.

ET US Fiscal Policy Monitor

Fiscal Policy

We track the strength and consistency of narratives about US fiscal policy, including budgets, tax policy and debt.

Updated through February 28, 2019. Updated monthly.

ET Credit Cycle Monitor

Knights Templar Bank

We track the strength of narratives about the credit cycle in general, plus lending, liquidity and other trends in credit markets.

Updated through February 28, 2019. Updated monthly.

In Focus

ET In Focus reports are single-issue topical analyses. They cover investment and portfolio construction topics, issues relating to the businesses of investment management and wealth management, and narrow analyses of the narrative structure and trends on specific issues, companies, sectors, countries or financial markets.

Getting Defensive

January 27, 2019

With aerospace and defense in the spotlight, we turn our own spotlight to the sector. We find a generally weak narrative structure with a lot of vulnerability to positive and negative events. We also find some interesting shift in project-specific narratives for Lockheed Martin (LMT).

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A Tale of Two Tales (Banking)

January 13, 2019

US Banks have a common narrative structure – two competing topics of vastly different sentiment, with one dominating market attention at any given time. Worthy of some thought going into bank earnings week.

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Multiple Ways to Lose (AAPL)

January 3, 2019

We examine how Apple found both of the ways to lose on narrative in less than two months’ time, and outline how that might change the playbook for the near-, medium- and long-term for different investor types.

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