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Director’s Cut
Looking to OECD for a lead
With the global macro dominating stock selection at the moment investors are
giving greater attention to macro indicators that can be used to time and adjust
equity exposure and investment strategies. One of the indicators Peter Eadon-
Clarke is interested in is the OECD’s leading indicator.
In his strategy weekly, Peter explains why he expects the OECD LI to trough in
early 2012. After excluding the two extreme declines in this indicator in 1974/75
and 2008/09, which both occurred after exceptional four-year periods of
sustained global growth, he says a normal down-cycle lasts 7 months. With the
indicator turning negative in July, the trough should occur in January 2012.
After looking at how sectors perform in the lead up to a trough, Peter concludes
that the best strategy in the Asian markets is to focus on niche growth stocks
and special situations, such as Denso (6902 JP), Yokogawa Electric (6841
JP), Samsung SDI (006400 KS) and Olam (OLAM SP). >> Read Report
We have also been looking at the OECD LI as a timing tool, and the results show
returns for global equities tend to be weakest when the indicator is both negative
and falling, as it is now. That said, with a trough expected in January, returns
would start to improve from that point, and when the highest returns can be
expected when the OECD keeps rising into positive territory.
OECD leading indicator is negative & falling, which suggests low
forward 12 month returns in global equities but given an anticipated
trough in January 2012, returns will start to improve in the new year
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Director’s Cut
Looking to OECD for a lead
With the global macro dominating stock selection at the moment investors are
giving greater attention to macro indicators that can be used to time and adjust
equity exposure and investment strategies. One of the indicators Peter Eadon-
Clarke is interested in is the OECD’s leading indicator.
In his strategy weekly, Peter explains why he expects the OECD LI to trough in
early 2012. After excluding the two extreme declines in this indicator in 1974/75
and 2008/09, which both occurred after exceptional four-year periods of
sustained global growth, he says a normal down-cycle lasts 7 months. With the
indicator turning negative in July, the trough should occur in January 2012.
After looking at how sectors perform in the lead up to a trough, Peter concludes
that the best strategy in the Asian markets is to focus on niche growth stocks
and special situations, such as Denso (6902 JP), Yokogawa Electric (6841
JP), Samsung SDI (006400 KS) and Olam (OLAM SP). >> Read Report
We have also been looking at the OECD LI as a timing tool, and the results show
returns for global equities tend to be weakest when the indicator is both negative
and falling, as it is now. That said, with a trough expected in January, returns
would start to improve from that point, and when the highest returns can be
expected when the OECD keeps rising into positive territory.
OECD leading indicator is negative & falling, which suggests low
forward 12 month returns in global equities but given an anticipated
trough in January 2012, returns will start to improve in the new year
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