Tactical Playbook

This week’s report looks to uncover opportunities that may lie hidden in the short-term noise. In this issue we include research from Waverly Advisors out of Corning, NY.  Waverly blends macro, quant, fundamentals, and real world derivatives experience to come up with truly tactical positions.  A few of their best ideas for active traders right now are short treasuries, long the Euro, long silver, and long copper.

A fun quote from their Macro Perspective:

“The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane.”  -Marcus Aurelius, (121AD to 180AD)

…and a summary of their macro view:

“Our macro investment view has evolved into four key themes over the past 18 months:
  • The US economy remains poised to outperform. USD relative strength is now being challenged by a potentially very significant expansion of the monetary base as the Fed deploys QE3 however. This complicates the investment implications of this underlying outperformance as it shifts asset values and impacts foreign trade.
  • China’s ability to protect and nurture growth domestically is in question and, regardless, new stimulus will have a much less profound impact on the global economy in the near-term than in prior cycles.
  • The final day of reckoning has yet to pass for Europe, making any EUR denominated asset exposure fraught with risk unless actively managed.
  • Global bond markets are fundamentally overvalued.
Put simply, China can’t save the world, the EU can’t fix what is broken without feeling much more pain, the US looks like the least dysfunctional of the primary wealthy economies (if only by a very modest margin)”

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Chris Noye
Head of Sales

Waverly Advisors, LLC
noye@waverlyadvisors.com
(585) 662-5189 (O)
(646) 842-1619 (M)

About

Waverly’s Tactical research is a propriety blend of quantitative and statistical research, macroeconomic factors, and discretionary inputs. We eschew most standard technical tools and methodologies therefore our perspectives and recommendations tend to be uncorrelated with most other research. Our risk management is central to our success.

Our Macro work blends blending behavioral studies with traditional econometrics and forecasting. This focus on the narrative aspects of macroeconomic and geopolitical factors provides a valuable input into financial market action and risk and complements our tactical discipline.

Our team is comprised of practitioners who have actively and successfully managed money and we are proud of our performance. Readers following our recommendations, risking 3% of their account equity per trade, would have seen returns of roughly 55% (uncompounded) over the last three years, and solid double digit returns in each of the three.