2018 investment ideas (financial markets only!)
Discussion
I thought it might be interesting to have a thread in which we can compare investment ideas going into 2018. We can then look back on it through the year so as to manage the contribution from the several Hindsight Capital employees who seem to frequent this part of the forum ;>
I guess I should go first....
1. UK Equities will disappoint as Brexit uncertainties persist [FTSE All Share @3900, FTSE100 @6900]
2. GBP, against the odds, may actually strengthen [GBPUSD @1.40, EURGBP @0.82]
3. Euro Eq will outperform other developed makets driven by gentle earnings growth and PE expansion [Eurostoxx 600 @425]
4. US Eq (where too much earnings growth has been priced in) will see a correction in H1, but it won't be a disaster [S&P500 @2600 having touched 2200]
5. There'll be better opportunities to buy credit across the spectrum than there are today
6. Compulsive sellers of US vol will experience lasting pain as their fingers are finally caught by the heavy roller [realised vol +50% yoy]
7. Tech will underperform with some high-profile re-ratings in the US [Nasdaq @6000]
8. Expensive "bond proxy" valuations will be undermined by US rate rises and the emergence of substitute holdings
9. Tesla and BTC shorts (albeit only those with the cojones to hang on through significant pain) will have their day [TSLA <200, BTCUSD<8000]
10. Cash will prove to be the most over-sold asset class as 2017 becomes 2018
I am fully aware - see 2017 investment performance thread - that I am talking my own book..!
I guess I should go first....
1. UK Equities will disappoint as Brexit uncertainties persist [FTSE All Share @3900, FTSE100 @6900]
2. GBP, against the odds, may actually strengthen [GBPUSD @1.40, EURGBP @0.82]
3. Euro Eq will outperform other developed makets driven by gentle earnings growth and PE expansion [Eurostoxx 600 @425]
4. US Eq (where too much earnings growth has been priced in) will see a correction in H1, but it won't be a disaster [S&P500 @2600 having touched 2200]
5. There'll be better opportunities to buy credit across the spectrum than there are today
6. Compulsive sellers of US vol will experience lasting pain as their fingers are finally caught by the heavy roller [realised vol +50% yoy]
7. Tech will underperform with some high-profile re-ratings in the US [Nasdaq @6000]
8. Expensive "bond proxy" valuations will be undermined by US rate rises and the emergence of substitute holdings
9. Tesla and BTC shorts (albeit only those with the cojones to hang on through significant pain) will have their day [TSLA <200, BTCUSD<8000]
10. Cash will prove to be the most over-sold asset class as 2017 becomes 2018
I am fully aware - see 2017 investment performance thread - that I am talking my own book..!
WindyCommon said:
I thought it might be interesting to have a thread in which we can compare investment ideas going into 2018. We can then look back on it through the year so as to manage the contribution from the several Hindsight Capital employees who seem to frequent this part of the forum ;>
I guess I should go first....
1. UK Equities will disappoint as Brexit uncertainties persist [FTSE All Share @3900, FTSE100 @6900]
2. GBP, against the odds, may actually strengthen [GBPUSD @1.40, EURGBP @0.82]
3. Euro Eq will outperform other developed makets driven by gentle earnings growth and PE expansion [Eurostoxx 600 @425]
4. US Eq (where too much earnings growth has been priced in) will see a correction in H1, but it won't be a disaster [S&P500 @2600 having touched 2200]
5. There'll be better opportunities to buy credit across the spectrum than there are today
6. Compulsive sellers of US vol will experience lasting pain as their fingers are finally caught by the heavy roller [realised vol +50% yoy]
7. Tech will underperform with some high-profile re-ratings in the US [Nasdaq @6000]
8. Expensive "bond proxy" valuations will be undermined by US rate rises and the emergence of substitute holdings
9. Tesla and BTC shorts (albeit only those with the cojones to hang on through significant pain) will have their day [TSLA <200, BTCUSD<8000]
10. Cash will prove to be the most over-sold asset class as 2017 becomes 2018
I am fully aware - see 2017 investment performance thread - that I am talking my own book..!
Some interesting thoughts - nice to see someone prepared to post some views in advance, rather than the vague, retrospective cherry-picked reviews so often seen here.I guess I should go first....
1. UK Equities will disappoint as Brexit uncertainties persist [FTSE All Share @3900, FTSE100 @6900]
2. GBP, against the odds, may actually strengthen [GBPUSD @1.40, EURGBP @0.82]
3. Euro Eq will outperform other developed makets driven by gentle earnings growth and PE expansion [Eurostoxx 600 @425]
4. US Eq (where too much earnings growth has been priced in) will see a correction in H1, but it won't be a disaster [S&P500 @2600 having touched 2200]
5. There'll be better opportunities to buy credit across the spectrum than there are today
6. Compulsive sellers of US vol will experience lasting pain as their fingers are finally caught by the heavy roller [realised vol +50% yoy]
7. Tech will underperform with some high-profile re-ratings in the US [Nasdaq @6000]
8. Expensive "bond proxy" valuations will be undermined by US rate rises and the emergence of substitute holdings
9. Tesla and BTC shorts (albeit only those with the cojones to hang on through significant pain) will have their day [TSLA <200, BTCUSD<8000]
10. Cash will prove to be the most over-sold asset class as 2017 becomes 2018
I am fully aware - see 2017 investment performance thread - that I am talking my own book..!
1. I think things will perform better than this, but maybe not by much
2. Certainly strengthen, but no views on the level
3. Less sure of this
4. Seems reasonable
5. Sure credit spreads will widen, but not sure whether they will widen quickly enough to offset the higher carry.
6. Given where vol currently is, this seems likely.
7. No idea!
8. US rate rises have been well telegraphed, so much of this must surely already be in the price?
9. Interesting
10. Hmm
sidicks said:
WindyCommon said:
I thought it might be interesting to have a thread in which we can compare investment ideas going into 2018. We can then look back on it through the year so as to manage the contribution from the several Hindsight Capital employees who seem to frequent this part of the forum ;>
I guess I should go first....
1. UK Equities will disappoint as Brexit uncertainties persist [FTSE All Share @3900, FTSE100 @6900]
2. GBP, against the odds, may actually strengthen [GBPUSD @1.40, EURGBP @0.82]
3. Euro Eq will outperform other developed makets driven by gentle earnings growth and PE expansion [Eurostoxx 600 @425]
4. US Eq (where too much earnings growth has been priced in) will see a correction in H1, but it won't be a disaster [S&P500 @2600 having touched 2200]
5. There'll be better opportunities to buy credit across the spectrum than there are today
6. Compulsive sellers of US vol will experience lasting pain as their fingers are finally caught by the heavy roller [realised vol +50% yoy]
7. Tech will underperform with some high-profile re-ratings in the US [Nasdaq @6000]
8. Expensive "bond proxy" valuations will be undermined by US rate rises and the emergence of substitute holdings
9. Tesla and BTC shorts (albeit only those with the cojones to hang on through significant pain) will have their day [TSLA <200, BTCUSD<8000]
10. Cash will prove to be the most over-sold asset class as 2017 becomes 2018
I am fully aware - see 2017 investment performance thread - that I am talking my own book..!
Some interesting thoughts - nice to see someone prepared to post some views in advance, rather than the vague, retrospective cherry-picked reviews so often seen here.I guess I should go first....
1. UK Equities will disappoint as Brexit uncertainties persist [FTSE All Share @3900, FTSE100 @6900]
2. GBP, against the odds, may actually strengthen [GBPUSD @1.40, EURGBP @0.82]
3. Euro Eq will outperform other developed makets driven by gentle earnings growth and PE expansion [Eurostoxx 600 @425]
4. US Eq (where too much earnings growth has been priced in) will see a correction in H1, but it won't be a disaster [S&P500 @2600 having touched 2200]
5. There'll be better opportunities to buy credit across the spectrum than there are today
6. Compulsive sellers of US vol will experience lasting pain as their fingers are finally caught by the heavy roller [realised vol +50% yoy]
7. Tech will underperform with some high-profile re-ratings in the US [Nasdaq @6000]
8. Expensive "bond proxy" valuations will be undermined by US rate rises and the emergence of substitute holdings
9. Tesla and BTC shorts (albeit only those with the cojones to hang on through significant pain) will have their day [TSLA <200, BTCUSD<8000]
10. Cash will prove to be the most over-sold asset class as 2017 becomes 2018
I am fully aware - see 2017 investment performance thread - that I am talking my own book..!
1. I think things will perform better than this, but maybe not by much
2. Certainly strengthen, but no views on the level
3. Less sure of this
4. Seems reasonable
5. Sure credit spreads will widen, but not sure whether they will widen quickly enough to offset the higher carry.
6. Given where vol currently is, this seems likely.
7. No idea!
8. US rate rises have been well telegraphed, so much of this must surely already be in the price?
9. Interesting
10. Hmm
I think Tech has still a way to go....
As long as US growth can be sustained at it's new level then the rate rises should go ahead as scheduled, which will support the finance sector.
However banks have been on a tear since one week prior to the Nov '16 election. I went heavily overweight in Finance a few Months before and have dialed it back a bit to sensibly overweight
. Not sure there's too much left by way of a premium over the S&P Asia and Emerging Markets, these are not just people making sneakers and low end clothing, there are some world leading companies.
Asia and emerging Markets up 30% in 2017, they are a little dependent on how China wants to play things, but I don't see too much hindrance for a repeat.
Japan also burst into life after a 20 year slumber, no opinion on Japan I usually ignore them as I find them difficult to understand.
Eastern Europe. By value, that's basically Russia and Turkey, I had high hopes for this region, but the US sanctions xxxkxx that.
As a sector it was up 16%, so not too bad, benefited from oil price recovery. If the US soften on sanctions and oil makes even just $60 it should be up an easy 20% in '18.. Sherbank leading the way.
No point in me commenting on UK....you know the problems.
Diversification is, and always has been the answer, so you still need 40 - 50% of home country equity, Not sure I would choose the FTSE 100 for that !!!, 250 or All Share...not forgetting the Pound could easily make 1.38 which could ease inflation a little.
Then cherry pick regions, countries or sectors that will outperform to elevate your final result.
The less sure you are..the higher your cash component.
If only it were that easy
BanzaiMan said:
Don't really see how that is properly diversified when UK makes up only ~5% of global cap
It isn't but some people either seem terrified of exchange rate risk or start from a default 100% UK equities viewpoint.Personally I've got enough other assets that are tricky to relocate outside the UK that I start from a default position of investing 100% ex-UK, and only buy UK investments if there's a compelling case.
xeny said:
It isn't but some people either seem terrified of exchange rate risk or start from a default 100% UK equities viewpoint.
Personally I've got enough other assets that are tricky to relocate outside the UK that I start from a default position of investing 100% ex-UK, and only buy UK investments if there's a compelling case.
Perfectly straightforward to purchase non-UK assets for diversification but without being exposed to FX risk.Personally I've got enough other assets that are tricky to relocate outside the UK that I start from a default position of investing 100% ex-UK, and only buy UK investments if there's a compelling case.
sidicks said:
xeny said:
It isn't but some people either seem terrified of exchange rate risk or start from a default 100% UK equities viewpoint.
Personally I've got enough other assets that are tricky to relocate outside the UK that I start from a default position of investing 100% ex-UK, and only buy UK investments if there's a compelling case.
Perfectly straightforward to purchase non-UK assets for diversification but without being exposed to FX risk.Personally I've got enough other assets that are tricky to relocate outside the UK that I start from a default position of investing 100% ex-UK, and only buy UK investments if there's a compelling case.
Advance apologies
http://www.21stcenturymotors.co.uk/
Audi A6 saloon deal I mentioned earlier.
No response as to whether it’s a good deal though?!?
Audi A6 saloon deal I mentioned earlier.
No response as to whether it’s a good deal though?!?
strippier said:
http://www.21stcenturymotors.co.uk/
Audi A6 saloon deal I mentioned earlier.
No response as to whether it’s a good deal though?!?
Wrong forum / thread?!Audi A6 saloon deal I mentioned earlier.
No response as to whether it’s a good deal though?!?
xeny said:
I presumed that for no change in FX (considering a spherical tracker obviously!) the return of a hedged tracker would be less than a non-hedged one? You're removing a risk, so presumably there's a return cost?
There is a hedging cost, but FX markets are the most liquid out there, so this is normally very small.The outcome, in terms of return, could be higher or lower than the unhedged version depending on actual FX movements.
xeny said:
sidicks said:
Plenty of currency-hedged trackers out there?!
I presumed that for no change in FX (considering a spherical tracker obviously!) the return of a hedged tracker would be less than a non-hedged one? You're removing a risk, so presumably there's a return cost?sidicks said:
There is a hedging cost, but FX markets are the most liquid out there, so this is normally very small.
The outcome, in terms of return, could be higher or lower than the unhedged version depending on actual FX movements.
I've not looked closely, but a quick google gives http://www.cityam.com/274886/currency-hedging-conu... which quotes " around 1.5 per cent each year to hedge US dollars back into pounds". Am I misunderstanding or is this figure wildly inaccurate?The outcome, in terms of return, could be higher or lower than the unhedged version depending on actual FX movements.
xeny said:
I've not looked closely, but a quick google gives http://www.cityam.com/274886/currency-hedging-conu... which quotes " around 1.5 per cent each year to hedge US dollars back into pounds". Am I misunderstanding or is this figure wildly inaccurate?
That's the carry cost, I was referring to the transition cost.FX risk is an interesting one for private investors, perhaps particularly at present if your liabilities are in GBP.
Hedging at fund level (as discussed above) is inefficient not least because it cannot take into account the sensitivities of underlying holdings to FX, only the currencies in which they are denominated. We saw this demonstrated very well as GBP fell post the Brexit vote when not all hedged funds behaved as their managers (& holders!) might have expected.
Fully unhedged has obvious risks too.
In practice - when eating my own cooking building portfolios with funds - I aim for a rough balance between hedged and unhedged holdings. I think this is the mid-point of a spectrum where the extremes are unhelpful places to be.
Hedging at fund level (as discussed above) is inefficient not least because it cannot take into account the sensitivities of underlying holdings to FX, only the currencies in which they are denominated. We saw this demonstrated very well as GBP fell post the Brexit vote when not all hedged funds behaved as their managers (& holders!) might have expected.
Fully unhedged has obvious risks too.
In practice - when eating my own cooking building portfolios with funds - I aim for a rough balance between hedged and unhedged holdings. I think this is the mid-point of a spectrum where the extremes are unhelpful places to be.
Edited by WindyCommon on Sunday 17th December 16:03
WindyCommon said:
FX risk is an interesting one for private investors, perhaps particularly at present if your liabilities are in GBP.
Hedging at fund level (as discussed above) is inefficient not least because it cannot take into account the sensitivities of underlying holdings to FX, only the currencies in which they are denominated. We saw this demonstrated very well as GBP fell post the Brexit vote where not all hedged funds behaved as their managers (& holders!) might have expected.
Fully unhedged has obvious risks too.
In practice - when eating my own cooking building portfolios with funds - I aim for a rough balance between hedged and unhedged holdings. I think this is the mid-point of a spectrum where the extremes are unhelpful places to be.
Certainly there is sometimes value in being unhedged in some currencies at certain times.Hedging at fund level (as discussed above) is inefficient not least because it cannot take into account the sensitivities of underlying holdings to FX, only the currencies in which they are denominated. We saw this demonstrated very well as GBP fell post the Brexit vote where not all hedged funds behaved as their managers (& holders!) might have expected.
Fully unhedged has obvious risks too.
In practice - when eating my own cooking building portfolios with funds - I aim for a rough balance between hedged and unhedged holdings. I think this is the mid-point of a spectrum where the extremes are unhelpful places to be.
jeff m2 said:
I'm with him on # 3, there have been quite large shifts towards European equity according to people who monitor Investment "destinations" in the US.
I think Tech has still a way to go....
As long as US growth can be sustained at it's new level then the rate rises should go ahead as scheduled, which will support the finance sector.
However banks have been on a tear since one week prior to the Nov '16 election. I went heavily overweight in Finance a few Months before and have dialed it back a bit to sensibly overweight. Not sure there's too much left by way of a premium over the S&P
Asia and Emerging Markets, these are not just people making sneakers and low end clothing, there are some world leading companies.
Asia and emerging Markets up 30% in 2017, they are a little dependent on how China wants to play things, but I don't see too much hindrance for a repeat.
Japan also burst into life after a 20 year slumber, no opinion on Japan I usually ignore them as I find them difficult to understand.
Eastern Europe. By value, that's basically Russia and Turkey, I had high hopes for this region, but the US sanctions xxxkxx that.
As a sector it was up 16%, so not too bad, benefited from oil price recovery. If the US soften on sanctions and oil makes even just $60 it should be up an easy 20% in '18.. Sherbank leading the way.
No point in me commenting on UK....you know the problems.
Diversification is, and always has been the answer, so you still need 40 - 50% of home country equity, Not sure I would choose the FTSE 100 for that !!!, 250 or All Share...not forgetting the Pound could easily make 1.38 which could ease inflation a little.
Then cherry pick regions, countries or sectors that will outperform to elevate your final result.
The less sure you are..the higher your cash component.
If only it were that easy
Are there any tech stocks that look interesting to you? I think Tech has still a way to go....
As long as US growth can be sustained at it's new level then the rate rises should go ahead as scheduled, which will support the finance sector.
However banks have been on a tear since one week prior to the Nov '16 election. I went heavily overweight in Finance a few Months before and have dialed it back a bit to sensibly overweight
. Not sure there's too much left by way of a premium over the S&P Asia and Emerging Markets, these are not just people making sneakers and low end clothing, there are some world leading companies.
Asia and emerging Markets up 30% in 2017, they are a little dependent on how China wants to play things, but I don't see too much hindrance for a repeat.
Japan also burst into life after a 20 year slumber, no opinion on Japan I usually ignore them as I find them difficult to understand.
Eastern Europe. By value, that's basically Russia and Turkey, I had high hopes for this region, but the US sanctions xxxkxx that.
As a sector it was up 16%, so not too bad, benefited from oil price recovery. If the US soften on sanctions and oil makes even just $60 it should be up an easy 20% in '18.. Sherbank leading the way.
No point in me commenting on UK....you know the problems.
Diversification is, and always has been the answer, so you still need 40 - 50% of home country equity, Not sure I would choose the FTSE 100 for that !!!, 250 or All Share...not forgetting the Pound could easily make 1.38 which could ease inflation a little.
Then cherry pick regions, countries or sectors that will outperform to elevate your final result.
The less sure you are..the higher your cash component.
If only it were that easy
I have a few in mind, but it's always interesting to see other people's ideas
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