Outside the Box, December 2014

15 Surprises for 2015

December 31, 2014

It’s that time of year when people start thinking about New Year’s resolutions and investment planning for the future. It’s also the time of year when analysts feel more or less compelled to offer up forecasts. My friend Doug Kass turns the forecasting process on its head by offering 15 potential surprises for 2015 (plus 10 also-rans).  But he does so with a healthy measure of humility, starting out with a quote from our mutual friend James Montier (now at GMO):

(E)conomists can't forecast...

The Burning Questions For 2015

December 18, 2014

Louis Gave is one of my favorite investment and economic thinkers, besides being a good friend and an all-around fun guy. When he and his father Charles and the well-known European journalist Anatole Kaletsky decided to form Gavekal some 15 years ago, Louis moved to Hong Kong, as they felt that Asia and especially China would be a part of the world they would have to understand. Since then Gavekal has expanded its research offices all over the world. The Gavekal team’s various research arms...

How the Rising Dollar Could Trigger the Next Global Financial Crisis

December 11, 2014

This week’s Outside the Box continues with a theme that I and my colleague Worth Wray have been hammering on for some time: the very real potential for a rising dollar to trigger the next global financial crisis.

We are concerned about the consequences of multi-speed economic growth around the world and the growing divergence between major central banks. In our opinion, if these trends persist, they likely mean (1) a major US dollar rally, (2) a rapid unwind of QE-induced capital flows to...

The World’s Dumbest Idea

December 4, 2014

In today’s Outside the Box the redoubtable James Montier of GMO lifts his lance to prick the underbelly of the Mighty SVM. (That’s Shareholder Value Maximization, for you newbies.) “The world’s dumbest idea” (among many candidates in the world of finance), says James, citing none other than “Neutron Jack” Welch in support.

After noting that taking on SVM “is a little like criticizing motherhood and apple pie,” James sets right to work, tracing the monster’s birth to an editorial by Milton...