Every week I try to take noteworthy events and provide accessible commentary regarding the potential impacts of these events and my own personal interpretation. These comments are not necessarily the viewpoint of Newfound Research and solely represent my own personal perspective.

Week Ending: April 19th, 2013

Although stories below will echo sentiments around the plunge in Gold, weakening global forecasts, and a bifurcated recovery in the U.S., this week was really about the ongoing tragedy surrounding the Boston Marathon. Since 9/11, we haven’t had the opportunity to see how Americans, shoulder to shoulder with heads held high, come together and provide emotional and physical support in times of great tragedy and chaos. From hearing the stories of the brave souls that ran towards exploding buildings, to people offering shelter and housing to anyone that needed it, to a heart-felt confession of a Chechnian Uncle who was deeply ashamed (and completely unaware) of the heinous crimes his nephews had committed, the city of Boston has showed its resilience, fortitude, pride, and cohesion in one of the worst tragedies on U.S. soil in decades. You’re in our hearts and in our thoughts Boston, we’re a lucky country to have you.

Noteworthy Reads of the Week

  • In case you missed it the first time around, Nöel Amenc & Lionel Martellini published a brief one page, but incredibly insightful essay in the Journal of Portfolio Management entitled, “In Diversification We Trust?”. Although it was published in 2011, it still holds incredible, cogent insight into better understanding risk management and the purposes of Diversification
  • Leading Economic Indicators, as published the OECD, declined for the first time since August.
  • The much talked about “bifurcated recovery” — where smaller to medium size businesses are still having a challenging time growing profits whereas large corporations have grown earnings at substantial paces — was succinctly detailed by the NFIB (National Federation for Independent Business) in a presentation this week
  • There were several different claims about the reason behind the Gold plunge this week. Some claimed that lowered Chinese GDP numbers signaled an overall decline in the demand for commodity prices (with gold “falling with the tide”), whereas others claimed the selloff had to do with forcing Cyprus’ hand to liquidate gold reserves to pay for mandated austerity measures (which would then potentially create a standard to be followed by other debt stricken countries in the EU).
  • The IMF lowered their global economic growth forecast from 3.5% to 3.3%, and the contraction in the EU was projected to be worse than initially foreseen with an adjusted loss in output from -0.2% to -0.3% output.

Benjamin is a Managing Director in Newfound’s Product Development and Quantitative Strategies group, where he is responsible for the ongoing research and development of new intellectual property and strategies. Specifically, Benjamin’s focus is in the area of exploring model applications to fundamental, economic and systemic market variables. Drawing on his years of experience in the financial services industry, he helps to ensure that Newfound’s products and messaging effectively meet the needs of investors and portfolio managers. He also plays a critical role in developing new business and client relationships.