During the first days of this correction we sent a lot of clients an email explaining that corrections occur on average every 18 months. Since then, Matt McLennan, the manager of the First Eagle Global fund, published an excellent piece giving his assessment of the current environment. Matt believes this…
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“Life’s bills don’t always come at market tops.” Charles deVaulx, International Value Advisors (former co-manager with Jean Marie Eveillard at First Eagle Global) Executive Summary The key thesis of our investment strategy is that a “go anywhere” approach of buying cheap high quality securities is the recipe for investment success….
The view of many investment professionals we admire is that global central banks have created a “rigged market,” where stock prices have gone up despite a recessionary economy. Since these unprecedented actions, asset prices have responded almost immediately when any directional change in policy has even been suggested. The Fed decision to “taper” bond purchases is its first suggestion of an exit strategy and has wide ranging implications for asset markets including substantially increased volatility.