Monthly management comment
Macro & Politics: “ “Mother Angela” set to win a fourth mandate”
Mrs. Merkel participated in a very polite television debate leaving very little doubt on the outcome of the forthcoming elections in Germany. Everyone seem to welcome the longevity of her reign but one cannot avoid wondering if democracy in Europe does not deserve some renewal as well as fresh blood and thoughts.
In the US, GDP growth seems to be accelerating, reaching a 3% annual pace despite being governed by what most media and observers call more or less as a lunatic.
There are no shortage of other lunatics and the North Korean president seems poised to sprint his nuclear program in order to reach enough dissuasive power and maintain his long-lasted grip on power. The current Korean tension is taking its toll on markets, who are rediscovering the notion of risk.
The overall economy continues to do well and macro indicators show a rather positive environment with all major economies enjoying growth simultaneously for the first time since 2007. Let us hope that the next couple of years will defer from 2008 and 2009.
Markets: “Technical concerns”
Corporate earnings were strong with a majority of companies reporting positive surprises. Nevertheless, many indexes have lost ground and dropped to levels close to their moving averages with some trading below these levels. We believe it is time to reduce some of the equity exposure and build some ammunition in case of an eventual correction.
Currency market still experience large fluctuations and increase the current trends of a weak USD and a strong EUR. SEK and NOK have regained some strength after months of sluggishness.
Over the month EuroStoxx 50 was down -0.8%, S&P500 +0.1%, OMX 30 -0.1% and Nikkei -1.4%.
Aulien was down 0.3% in August and is up 1.8% YTD.
Investment Themes & Favorite stocks: “Great results from Baba”
The Chinese web giant Alibaba reported very strong earnings and gained another 11% during the month.
We continue to increase our positions in the stock.
Some profits are taken in Attendo and Sampo.
We have also strengthened our holding in Doubleline Shiller (perf YTD: +18.3%, see enclosed report).