Charles Gave of Gavekal Research recently gave an interview as part of the Mauldin 2016 Strategic Research Conference. For those who do not yet follow Mr. Gave or Gavekal Research, we strongly recommend their blog (here), which is regularly updated with insightful content and analysis.
In the interview Mr. Gave explains “in the last year, for example, if you take the 15 biggest stock markets that are followed in the world, and you see how many of those have outperformed a US 10 year bond in a common currency and the answer is none… in the past (this) tended to occur during bear markets.” He continues “most bear markets arrive unannounced; people don’t understand why markets are going down. It’s at the end of the bear market, that you know why the market was going down.”
Mr. Gave continues to discuss the impact of low interest rates and what will happen, particularly to European sovereign debt, when interest rates rise.