Author: bbatchelor

Tax management should not be a substitute for portfolio management. Tax avoidance can potentially lead to gain avoidance.
We believe one of the most effective ways to protect portfolios from inflationary risks is to buy cheap assets. In our view, these are assets that may have been (or continue to be) out-of-favor with investors for one reason or another, and therefore, have depressed prices when viewed in relation to their future earnings or growth potential.
Taking everything into consideration, we believe interest rates continue to drift higher with the U.S. Treasury yield curve steepening (the spread between short- and long-term interest rates growing wider). As a result, we continue to position client portfolios to have less interest rate risk than our internal benchmarks.

Posted in Newsletter

Lessons, Speculation and Economic Recovery – Entasis Newsletter 2Q2021

Newsletter Summary

History has shown us that over time clients will be better off if we patiently manage risk in a way to participate strongly in market rallies while doing a better job defending client capital as markets inevitably recede for a time.
Many traditional stock valuation measures have become stretched. This has led to questions about the veracity of these metrics and their potential impact on future market returns.
Despite regional outbreaks of COVID-19, the global recovery is on track. With global activity measures improving, forecasters expect the global economy to expand by 5.8% in 2021.

Posted in Newsletter

Newsletter Summary

As it turns out, parasailing is quite peaceful, but new market perspectives are not always as calming.
Experience has taught us that maximizing risk to maximize return is fraught with pitfalls when managing portfolios for the long term.
The pandemic has forced a fundamental transformation of our economy. Once the economy is fully reopened, and the easy comparisons to last year roll off, the outlook becomes more challenging.

Posted in Newsletter

Newsletter Summary

At Entasis we prefer to hit for high average than to swing for home runs. Over time it should produce more consistency and less volatility.
We believe the U.S. stock market is priced close to perfection. When that happens, it does not take much to disappoint. Globally, there remain pockets of opportunity.
Until a significant portion of the population gets vaccinated, we expect an uneven recovery and further fiscal and monetary stimulus.

Posted in Newsletter

Newsletter Summary

“How much can I make in this investment?” and “How much can I lose in this investment?” are perspectives that always need to be weighed relative to one another.
Large divergences in the performance of U.S. large-cap v. small-cap stocks, growth v. value stocks and U.S. v emerging markets stocks have gapped even wider this year.
The path of the economy is highly dependent on the pandemic, fiscal stimulus, unemployment and the election. All of which have a wide range of potential outcomes.

Posted in Newsletter

Newsletter Summary

The impact of Fed liquidity on sentiment in the second quarter was staggering and it has opened some amazingly wide gaps among sub-asset classes. Our research work lists are full.
PE ratios tend to have a rather weak correlation to future stock prices over the short-term, but become a much more constructive tool to project return environments over longer periods.
While some economic data suggests a rebound is underway, analyst forecasts for Q2 economic growth range from -33% to -40%, which are numbers we never expected to see in our lifetimes.

Posted in Newsletter

Newsletter Summary

From a high level, we are always focused on a few key items: economic growth, interest rates and earnings. We believe that with an understanding of changes in those key variables we can develop a solid foundation for asset allocation decisions and fundamental investment decisions.
We never try to be surgical with the timing of our investment decisions. We believe that if we can be directionally correct on a consistent basis it improves the odds of long-term wealth compounding for clients.
The beginning of 2020 has been a historically unique period for individuals, businesses and financial markets. As we navigate the environment we are distilling our research down to the things we can control and positioning portfolios accordingly.

Posted in Newsletter