Selected Publications

International Series: The Base Case for India

November 2019

The investment opportunity in India is driven by some of the same social and economic transformations that have been taking place in China and Southeast Asia over the past several decades. India is particularly well positioned in Asia because of its very favorable demographic profile, longer potential runway of growth, stable and democratic political institutions and reasonably well-developed financial system. read more ❯

Q3
2019

Our View

October 2019

Third quarter returns for equities and bonds were mostly positive (Table 1) and mark a continuation of the narrative that low and declining interest rates are good for both equity and bond markets. The past is not necessarily prologue, but year to date there has been a bull market in optimism. For example, the S&P 500 has appreciated over 20%, while S&P 500 earnings have grown only 1.5%, the difference, of course, is an expansion in valuation multiples. Earnings will need to accelerate, or investors may grow concerned that stock prices are ahead of fundamentals, and this may be a tall order with global growth slowing and wage pressure rising. read more ❯

Unncessary Evils

Summer 2019

Basic Test. New Providence is led by experienced professionals who view investment counseling as a profession, not a business, and are committed to the pursuit of excellence in all aspects of our work. Such work centers on the shaping and ongoing refinement of both comprehensive and specialized investment programs for a select group of wealthy families and endowed charities. Given the US-centric bias of portfolios stewarded by many recipients of this essay — a bias at odds with the very full current pricing of assets flattered by it — the time is ripe for such principals to undertake a thorough review of their investment policies and practices. read more ❯

Q2
2019

Our View

July 2019

The second quarter offered something for everyone, with global stock and bond markets producing strong returns (see Table 1). The most interesting aspect of returns year to date has been the markets’ interpretation of the environment. Bond markets have been strong on the presumption that the Federal Reserve, and other global central banks, will cut rates due to data suggesting weaker economic growth. Lower bond yields and inverted yield curves have traditionally been indicators of something ominous coming, but equity markets have taken that same economic data and concluded that bad news is good news. The S&P 500, for example, closed the second quarter at an all-time high. read more ❯

Q1
2019

Our View

April 2019

In the first quarter, the Federal Reserve made four separate statements to the effect that they had, or would, stop tightening and let the unstated impression that their next step might even be to start easing. One would be justified in thinking that they had decided to give the stock market a reason to go up. If that was in fact their intention, it worked. The S&P 500 which had been down 13.5% in the fourth quarter, was up 13.6% in the first quarter (see Table 1). As a result, equity holders should be more than satisfied with returns for the quarter. However, a closer look at fundamental developments present a more nuanced view, one that highlights a deceleration in the growth trajectory of the U.S. economy and corporate earnings. read more ❯

International Series: The Case for Selective Investments in Southeast Asia

April 2019

For investors with a long-term horizon seeking to generate growth from equity securities, Southeast Asia offers a large and diverse universe in which to find attractive investment opportunities. read more ❯

On "Passive" Investing

January 2019

The nub of this note is telegraphed by its title, with passive surrounded by quotes to underscore the fact that all investment strategies, even and indeed especially ultra-diversified ones, entail the exercise of human judgment. How so? Because no one has assembled or indeed could assemble a portfolio comprising fractional interests in all investable assets — not without making crucial judgments about which assets to include, in what weights, and not without somehow compelling pre-existing owners of non-marketable assets to sell slices of them to complete the exercise. Of course, no sensible investor would want to hold a truly comprehensive basket of investable assets, especially one constructed in accordance with the most widely followed rule for “passive” portfolio construction circa 2019, namely capitalization weighting. read more ❯

International Series: The Base Case for China

November 2018

We believe that the Chinese stock markets represent an attractive investment universe for active equity managers. read more ❯

Our Views published prior to 2019 are available upon request.