Policy Opportunities

Companies often use lobbying to position themselves before a shift in public policy or, to fend off challenges to their business model.
“Rent Seeking” is not a traditional factor accounted for in investment analysis and
can positively impact corporate profits via changes in public policy.

New Sovereigns

Aggressive "beggar thy neighbor" monetary policy has pushed the yield of sovereign credit to multi-cycle lows;
in some instances these rates globally have gone negative. The concomitant currency debasement has eroded the relative "safety" premium relative to equities, creating an opportunity for an alternative.

Dividend Growth

The scarcity of yield from conventional sources and the increasingly lofty valuations has created a need for a more nuanced approach to dividend investing. Companies scoring well by dividend yield and dividend growth have, independently, produced the strongest risk-adjusted returns. Together they are the powerful source of total return.

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INSIGHT

Jun'19 Bohnsack

One Policy Error Waiting on Another

While we have increased our own odds of a downside shock and reduced our odds of an upside surprise, the greatest source of solace we could imagine would be the idea that the rebound in cyclicals is could as violent as the sell-off we recently saw – perhaps more so – if trade tensions dissipate.
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INSIGHT

May'19 Bohnsack

Handicapping the Outlook for U.S.-Sino Trade Negotiations

Negotiating a trade deal with China was never going to be easy and its always the details in the end that are the most difficult to iron out. While talks appeared to have stalled, China and U.S. policymakers claim they did not collapse following shorten negotiations but the near-term outlook does not look positive. With stock market viewing the outcome as binary that the trade deal gets done, it is likely to create more volatility as summer approaches. Hang in there.