“Long run is misleading guide to current affairs. In the long run we are all dead.” John Maynard Keynes

“Long run is misleading guide to current affairs. In the long run we are all dead.” John Maynard Keynes

Aulien S.C.A., SICAV – SIF Global Fund

Monthly management comment

Macro & Politics: “People are not voting as they ‘should ”

Latest Italian elections show, once again, a majority of voters against the political establishment and an ever-increasing mistrust towards Brussels. The happy few (amongst others Merkel and Macron) continue to defend their legitimacy (albeit being elected with some times less than 20 % of the nation-al votes) and more surprisingly still lectures citizens on what is right and wrong. There seems to be something rotten in the current state of the Europe-an affairs. The misbehaving Italian voters jiggled bond markets and spreads with 10 years Bund vs Italy going from 110 basis points to 300 before cur-rently stabilizing at approx. 210.

The end of the month was also rocked by the Trumps administration decision to impose tariffs and tolls on Canadian and European steel. The American diplomacy is constantly playing with foreign governments and investors nerves by continuously disputing deals and agreements.

Nevertheless, latest US macro figures show a stellar performance with lowest unemployment since April 2000. Fed will most probably proceed with a new rate hike in June while the ECB will continue its cautious tone, trapped be-tween a less vigorous economy and plenty of political issues.

Markets: “King USD is back”

On the back of this solid macro, the USD continued to shine towards most currencies. How can the trend stop if interest rate differential continues to rise? Versus the EUR, the greenback went from 1’23 to almost 1’15 in just a few weeks before currently consolidating at approx. 1’17.
Equity markets also showed a mixed bag of results with a strong US market (S&P up 2.2% and Nasdaq +5.3 %!) while Eurostoxx 50 dropped 3.7%, OMX 1.3% and Nikkei down 1.2%. Aulien was up 2.1% and is up 0.7% YTD.

The outperformance of the Nasdaq shows the considerable pull from new growing technologies vs traditional value stocks (the Swiss index with the likes of Nestlé, Roche and UBS is now down 8% YTD). Aulien strives to follow this trend and increased stakes in Ali Baba at USD 182.7 and Tencent at 49.5. Shares in Fanuc were sold as well as the short 20 years T-Bill (TBT:US) after its recent outperformance.

Another tech holding delivering the goods is intuitive surgical (ISRG:US) up more than 25% YTD.

Investment Themes & Favorite stocks: “Tomra, Lundin Petroleum, Netflix”

Recycling plastic liquid containers should definitively be a great business in the future. Tomra has great technology and is well positioned for this market. Oil prices remain high and political turmoil remains or even increases in the middle east. Lundin Petroleum will soon increase its production on its Norwe-gian sites.
Netflix continues to disrupt the traditional film and tv industry and its continues with success to expand its offer to an increasingly wide range of countries. We are looking to initiate a position in all these 3 stocks but would love to get an opportunity to buy on some weakness…

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