Research & Insights

Our investment decisions flow from incisive perspectives.

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February 2014

Kai W. Hong, CFA
Managing Director & Chief Investment Strategist

Following the sharp sell-off in the markets at the end of January, investor sentiment continued to be mixed. Valuations were fair to full. but expectations for better economic growth buoyed the optimistic. The first estimate of Q4 2013 GDP growth in the US came in at 3.2% (subsequently to be revised downward to 2.4%) on strengthening exports and increased consumer spending. The suspension of the US debt limit for a year gave further impetus to the markets. Political turmoil in Italy, Turkey, and (more bloodily) Ukraine, and weaker data out of China only slightly dampened enthusiasm. The month closed with the S&P 500 Index reaching record highs.

February was generally challenging for active managers. While the managers were able to add value over their indexes in down periods, the robust upswing that characterized most of the month was not favorable to most fundamental, stock-specific investment approaches. Those managers that were able to outperform did so through concentrated positions in a few favorable names. Although implied stock price correlations (as measured by S&P 500 options) initially declined, they have rebounded from the recent lows seen at the end of 2013. Increasing correlations may present fewer opportunities for value to be added through active management.

Anticipating Tomorrow’s Markets: Macroeconomic and Policy Implications | October 2013

Jonathan Neuberger, principal, Economists, Inc.

Speaker Presentation from Bivium Capital Investor Summit, October 2, 2013
Global Trends Shaping the 21st Century

In his PowerPoint presentation, Mr. Neuberger—a financial economics consultant and  former economist for the Federal Reserve Bank of San Francisco—highlights his economic outlook, certain policy implications and their likelihood for success: What is the current macroeconomic outlook and how might it impact today’s recovering but highly volatile market? He posits that ongoing debt and deficit issues, potential Fed tapering, improving housing dynamics, and the importance of the consumer are critical inputs to answering this question.

2013 Year in Review

Kai W. Hong, CFA
Managing Director & Chief Investment Strategist, Bivium Capital

If 2012 could be described as “exceptional,” 2013 was truly “astounding.” However unlike the previous year, regional and asset class differences were stark. US equities as represented by the Russell 3000 Index finished with a +33.6% return, the developed market MSCI World ex US Index returned +21.0%, and the MSCI Emerging Markets Index returned -2.6%. Performance in the fixed income markets was weak with the Barclays US Aggregate Index returning -2.0%.

The Hidden Brain | October 2013

Shankar Vedantam, Author
Keynote Speaker, Bivium Capital 2013 Investor Summit
Global Trends Shaping the 21st Century

Mr.Vedantam is a correspondent for NPR News and the author of The Hidden Brain. He focuses his reporting on how human behavior shapes the news. Mr. Vedantam discussed the role of “the hidden brain,” or unconscious biases, that exist in our everyday lives at our 2013 Investor Summit. In his view, a variety of factors, including heuristics and social dynamics, impact workplace dynamics, gender roles, team interaction, and even decision-making at the national level. Specifically, he addressed how unconscious biases influence financial decision-making. In the linked video, he expands on how the hidden brain affects communication and persuasion.

The Hidden Brain

External Perspectives | October 2013

Financial Crisis: What Went Wrong?

Jonathan Neuberger, principal, Economists, Inc.

Financial markets around the world continue to suffer from declining asset values, heightened concerns about risk, lack of available credit, and prospects for a global economic slowdown. The speed with which this crisis developed surprised many observers. Nonetheless, the seeds of the current financial crisis the seeds of the current financial crisis have been apparent for some time.