Practical analysis for investment professionals
21 January 2016

Weekend Reads for Global Investors: 2016 Wisdom from El-Erian and Gundlach

Posted In: Weekend Reads

2015 turned out to be a fruitless year for fund managers. Judging from the first few weeks, 2016 may be no better. And potentially even worse.

Stock markets worldwide, as indicated by the MSCI World Index, returned nothing for all of 2015. Hedge funds also turned in their worst scorecard since 2011. It was a tough year. And not only for stocks — bonds and cash did not fare well either.

On the first trading day of 2016 and the first day that new circuit-breaker rules were put into effect in China, the stock market there went into a nosedive. Within a week, the rules were suspended, and the man behind the rules became China’s public enemy number one. No cushy retirement jobs on Beijing Financial Street, China’s equivalent of Wall Street, in sight for him, I guess. Markets in New York, London, and Tokyo also lost ground in the first few weeks of 2016.

Sentiment on the Street is awfully bearish and understandably so. And just in case you are thinking of taking a stab at picking the bottom, seasoned investor Jeffrey Gundlach came out warning against just that. I’d listen to him. “Do not try to catch a falling knife,” as they say.

And it’s not just stocks. I spoke with investors in Beijing this week and currency is what’s on everyone’s mind. Offshore renminbi (RMB) has had some wild swings, so much so that it caught the attention of another veteran investor, Mohamed El-Erian. I wrote about the potential of a global currency war breaking out in this column over the summer. The situation now looks just as serious, if not more so. Even more notably, oil just dropped below the 12-year low this week and is searching for a bottom.

“As January goes, so goes the year.” If you believe in the January barometer, as many market practitioners do, brace yourself for a wild ride in the coming year.

Below is a list of links from the paragraphs above as well as some of the other interesting reads I have come across in recent weeks. Happy reading and enjoy the weekend.

Markets

Investing

Emerging Markets

The Soft Side of Business

And Now for Some Readings Truly for the Weekend . . .

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©iStockphoto.com/Christian Mueller

About the Author(s)
Larry Cao, CFA

Larry Cao, CFA, senior director of industry research, CFA Institute, conducts original research with a focus on the investment industry trends and investment expertise. His current research interests include multi-asset strategies and FinTech (including AI, big data, and blockchain). He has led the development of such popular publications as FinTech 2017: China, Asia and Beyond, FinTech 2018: The Asia Pacific Edition, Multi-Asset Strategies: The Future of Investment Management and AI Pioneers in Investment management. He is also a frequent speaker at industry conferences on these topics. During his time in Boston pursuing graduate studies at Harvard and as a visiting scholar at MIT, he also co-authored a research paper with Nobel laureate Franco Modigliani that was published in the Journal of Economic Literature by American Economic Association. Larry has more than 20 years of experience in the investment industry. Prior to joining CFA Institute, Larry worked at HSBC as senior manager for the Asia Pacific region. He started his career at the People’s Bank of China as a USD fixed-income portfolio manager. He also worked for US asset managers Munder Capital Management, managing US and international equity portfolios, and Morningstar/Ibbotson Associates, managing multi-asset investment programs for a global financial institution clientele. Larry has been interviewed by a wide range of business media, such as Bloomberg, CNN, the Financial Times, South China Morning Post and the Wall Street Journal.

2 thoughts on “Weekend Reads for Global Investors: 2016 Wisdom from El-Erian and Gundlach”

  1. Martin Landry, CFA, CFP, CAIA, CIMA, CIPM, AIF says:

    Larry – please try to present a balanced blend of opinions – it is an insult to the intelligence of many CFA charter holders to read a column from an employee of the CFA Institute that is in the same sensationalistic vein as that of “Marketwatch” and “Reuters” and the other run-of-the mill, fear-mongering news outlets.

    1. Larry Cao, CFA says:

      Martin,

      Thank you for visiting our blog and share your comment with us. We value the feedback from all our readers.

      Warm regards,
      Larry

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