ValueWalk reports on Sir Michael Hintze’s thoughts on the market outlook and key investment themes for 2014. Hintze’s thoughts were shared in the latest CQS Insights report, released to investors.
Hintze does not anticipate any “black hole” economic events over the next 12 months, but rather a gradual improvement in the economies of most developed nations.
That said, Hintze argues there is a strong likelihood of a number of “pot holes” in the [economic, legislative and geopolitical landscapes] in 2014, and that astute investors could position themselves to profit as these problems unfold in various areas. He specifically mentions the European periphery, the European parliamentary elections in May, Egypt, Syria/Iran or even a mismanagement of the looming Fed taper by Yellen as potential market-moving potholes to consider.
ValueWalk also notes Hintze’s predictions for the impact of a gradual Fed taper on the global economy:
The report advances the argument that a gradual Fed taper over the next year or so is actually not that major an event for the U.S. or other developed economies, but it could be a bigger deal for emerging economies. Hintze elaborates, “I have heard it said that QE did more to stimulate downtown Mumbai than downtown Detroit. As Taper slows central bank balance sheet growth, the reverse could be true.”