December 2019

Kindly find here below an update on our Nov 4 report :

A) December 15 is approaching. The decisions and comments on tariffs can lead the Market either higher or substantially lower. Tactically we reduce portfolios Betas.

B) We like the 2019 profits. As a consequence we are reducing short option positions, high beta exposures and create some cash. We prefer to include in the portfolio solid risk arbitrage situations, and lower Beta stocks.

C) We do not forget famous quotes like :

a ) “more money is lost anticipating a recession rather than from the recession itself ”.

b) “The stock market cemetery is full of market timers.”

c) “we have plenty of team managers in the stands and every Monday morning.”

D) If the market falls we will have the usual chorus of “I could see it coming”, “have sold my stocks” etc…etc… The problem is that these “Monday morning managers” did not own stocks during the wealth creation mechanism of market appreciations.

As a conclusion, We are only trying here an ex ante (not…ex post) adjustment to reflect our recent risk appetite.