Selected Publications

Capital Ideas - Pivoting Away from Traditional Fixed Income

August 2020

U.S. fixed income has been a reliable diversifying asset since the early 1980’s when the Federal Funds Target Rate reached 20% to combat rising inflation. Now, forty years later, fixed income yields are at a generational low and will not provide investors the return and diversifying benefits previously enjoyed. The immediate implication is that the commonly utilized 70/30 or 60/40 portfolio construct has substantially more risk than it has had in decades. read more ❯

Capital Ideas - Redefining Growth and Value Investing

July 2020

Investors of capital in 2020 must proactively confront and respond to the rapid convergence of technological innovation and disruption, and its impact on the reliability of historical investment tools, assumptions and lenses employed. A recalibration of core aspects of an effective investment management approach includes redefining the essential elements of “growth” and “value”. In addition, the value of future earnings and cash flow are fundamentally impacted by interest rates and inflation which are at the lowest read more ❯

Q2
2020

Our View

July 2020

Global equity markets rebounded strongly in the second quarter from late March market lows (Chart 1), exceeding many investor expectations that were acutely focused on frightful economic data and the continuing health crisis. Unprecedented global liquidity in the form of monetary and fiscal programs, improving economic data, and historically low interest rates, have led investors to the conclusion that equities are the only option for compounding long-term capital. read more ❯

Q1
2020

Our View

April 2020

First and foremost, everyone at New Providence hopes you and your family are healthy and safe. If you want or need to speak with any of us, for any reason, we are available at any time. The coronavirus is not just a human health crisis, it is also an economic one; and while we are all working remotely, we are entirely focused on successfully managing your capital through this crisis. read more ❯

Capital Ideas - Why Invest in Developing Asia?

March 2020

If one had to design the ideal stock market, what would it look like? It would have to offer a sizable number of securities, to enable the most skilled investors to build differentiated portfolios; provide sufficient liquidity, to allow flexibility in sizing positions; present valuable trading inefficiencies and frequent mispricing of stocks, to be exploited through fundamental research; exhibit a high dispersion of returns, favoring talented stock pickers over index huggers; and be supported by a steady stream of fund inflows from large allocators. read more ❯

Q4
2019

Our View

January 2020

We have now started the third decade of the 21st century. This gives us the opportunity to examine, decade by decade, performance of investment markets, in an attempt to determine whether there are patterns in the past that might give us some insight into the future. The primary conclusion that we reach is that what worked in one decade is unlikely to work as well in the next one, and conversely, what didn’t work in one decade is quite likely to work well going forward. Ten-year slices of performance data may seem arbitrary and calendar specific, but they are long enough to eliminate short-term trading patterns. read more ❯

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 ❯

Our Views published prior to 2019 are available upon request.