The Next Act…

US markets decisively put an end to the secular bear market in 2013. Where we go from here depends on a variety of risks and opportunities and our bias is structurally positive for portfolio growth. We expect an intense focus on corporate earnings, a bout of volatility, and continued evolution in the commercial application of technology.

2013: Moody, Grungy, Defiant

True to the teenage label we put on the year, 2013 had its moments. Moody over Fed tapering, Grungy in what drove prices up, Defiant in the speed of the breakout.

Technical Breakout to New Secular Bull Market

The technical breakout has been achieved on a combination of factors: easy money, share buybacks and rising confidence. The Next Act requires some additional elements.

Key Issues of 2014

The coming year offers opportunities for equity markets to move higher. However, this will take place in the context of much more volatility than we have seen in the past four years.

The Big Picture: Push/Pull

We are in a Push/Pull world. While governments and central banks pursue inflationary policies, corporations and individuals are acting as a counterweight. This is happening in the context of a mega shift in the structure of the global economy.

Technology Focus: The Age of Context

We have identified the key technologies that are poised to reshape the global economy, altering fundamental assumptions. To derive value from these changes, companies will have to invest to ensure access to hubs of innovation, capable suppliers, and highly skilled workers.

Global Challengers

Succeeding as a company in the networked economy requires new strategic thinking from senior management. We cover the key characteristics.

2014 Investment Strategy

Due to the probability of a much more volatile environment, 2014 will require special emphasis on risk management. Within this context, there will be many opportunities, and with the secular bull breakout, our bias will be to the buy side.