DWA 25,000

September 28, 2009

No, this isn’t the price level on some new-fangled unweighted index. It’s the number of views we’ve had of our blog over the past few months. We appreciate that you and hundreds of other investors have made www.systematicrelativestrength into one of your financial sites of choice and one of the thought leaders in relative strength investing. We will try to continue to provide you with original content, articles and news pertaining to relative strength and global trends, and to continue to give you our unique spin on the relative strength style of investing.

We hope there will be even more value for you down the road. We are exploring ways to package audiovisual presentations for you and/or your clients, so that may be the next frontier. In everything we do, our intent is to inform, entertain, and provoke thought and discussion. We hope we are succeeding, but if you have feedback-positive or negative-we’d love to hear from you. Success is never final and we’re always looking for ways to improve.

1 Comment | Uncategorized | Permalink
Posted by Mike Moody

The Global Flow of Business

September 28, 2009

The Times Online reports that Brevan Howard, the UK’s largest hedge fund ($27 billion), is planning to relocate to Switzerland due to a new performance tax of 50% facing the firm. More firms are likely to follow.

Some politicians seem totally unfamiliar with the concept of elasticity, which is taught in every basics economics course. They seem to think that the imposition of higher taxes will simply result in more revenue without realizing that onerous taxes could have just the opposite impact on revenue. In economics, elasticity is the ratio of the percent change in one variable to the percent change in another variable. It is a tool for measuring the responsiveness of a function to changes in parameters in a relative way. A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied. On the other hand, an inelastic good or service is one in which changes in price witness only modest changes in the quantity demanded or supplied, if any at all. In the case of Brevan Howard, and many, many others, apparently the elasticity associated with this tax hike is greater than imagined by the politicians.

In our global economy, talent is willing to relocate to locations where business is treated more favorably. Therefore, an investment strategy should be able to do the same. We take great comfort in knowing that our global tactical asset allocation strategies are able to adapt to these changes in the flows of business from one part of the world to the other with great ease.

Leave a Comment » | Tactical Asset Alloc | Permalink
Posted by Andy Hyer

Don’t Worry About the Dollar

September 28, 2009

Now the president of the World Bank is getting into the act. He is giving a speech tomorrow and some of his pre-released comments suggest that it is not a foregone conclusion that the U.S. dollar will remain the world’s reserve currency.

A falling dollar really isn’t a problem for consumers as long as they are not buying anything grown or manufactured abroad and imported, like autos or auto parts, appliances, computers, consumer electronics, clothing, shoes, household goods, lumber, tools, some fruits and vegetables, or most anything at Wal-Mart, Target, or any other big-box retailer. (Even some oil is being sold in euros these days.)

Nope, nothing to worry about as long as you don’t need food, shelter, clothing, or energy. On the other hand, if you wish to hedge your bets, you might want to consider a global allocation portfolio.

Leave a Comment » | Markets, Tactical Asset Alloc, Thought Process | Permalink
Posted by Mike Moody