TRILOGY GLOBAL ADVISORS-WORLD REPORT

Trilogy Global Advisors

TRILOGY WORLD REPORT

Spring 2008 | Foggy Bottom?
by William Sterling

Foggy Bottom is an old neighbourhood in Washington, D.C., so named because of the vapours rising from the swamp. We are hopeful that it is also an apt name for the current market environment, which has numerous characteristics associated with stock market bottoms. That said, the outlook is clouded by noxious vapours rising from the financial swamps...<full report>

December 2007 | Will 2008 be a Happy New Year?
by William Sterling

Global equity investors may be forgiven for approaching the new year with more than the real degree of trepidation. There is certainly no shortage of things to worry about, with the financial media devoting considerable ink to the global credit crisis, high oil prices, the week U.S. dollar and...<full report>

October 2007 | Reading the Fed's Playbook
by William Sterling

Every August, central bankers from around the world get together for some high-altitude training in Jackson Hole, Wyoming. If they were football players, they would huddle around whiteboards filled with X's and O's ...<full report>

September 2007 | Assessing August Angst
by William Sterling

For some reason, tumultuous events seem to happen in August: Russian revolutions, European exchange rate crises, Middle East wars, etc. This time around, it is turmoil in global debt and equity markets related to the U.S. mortgage crisis...<full report>

August 2007 | HAS JAPAN BECOME A "NORMAL" COUNTRY FOR GLOBAL INVESTORS?
By William Sterling

In mid-June, the Financial Times carried an article that argued, "to treat Japan as an economic curiosity looks ever more odd." The author, Chris Giles, noted that the world's second-largest economy is widely considered to be an economic and financial anomaly...<full report>

July 2007 | PEAK OIL: PRESCIENT OR PREMATURE?
By William Sterling

Persistently high oil prices have been a key feature of the global investment climate for several years thanks to strong global and geopolitical developments in nations ranging from Iraq to Nigeria to Venezuela. The world economy and financial markets...<full report>

June 2007 | THE BLACK SWAN SAYS WE'RE BIRDBRAINS.
By William Sterling

Investors spend a lot of time thinking about risk management, so it's a little unsettling to have a profound thinker tell you that everything you think you know about the topic is dead wrong. That's the basic storyline of...<full report>

May 2007 | RETURN TO BUYBACK MOUNTAIN
By William Sterling

Last August, we wrote about the astonishingly high level of U.S. share buybacks in a piece called "Buyback Mountain." We noted that the buybacks, along with dividend payments made the valuation of stocks look more favourable than commonly perceived. <full report>

April 2007 | MUCH ADO ABOUT NOTHING?
By William Sterling

Whenever we encounter significant spikes in stock market volatility, we tend to recall research by the well-known Yale University economist Robert Shiller. He once demonstrated that...<full report>

March 2007 | UPDATE ON MOORE'S LAW
By William Sterling

This January, when financial market participants focused on minutiae such as warm winter weather would mean for Fed policy, we were intrigued by one news story that seemed to garner little attention. It had do do with a set of dueling announcements made by Intel and IBM about their recent breakthroughs in semiconductor design. <full report>

January 2007 | GLOBAL OUTLOOK 2007: GOLDILOCKS OR THE THREE BEARS?
by William Sterling

It is the time of year for crystal ball gazing and story telling. We have already noticed many guest appearances of Little Miss Goldilocks, who is the investment communities favorite fairy tale character. With world stock markets hitting new...<full report>

December 2006 | ON DINOSAURS AND DERIVATIVES
by William Sterling

The $26 trillion question is whether a future rise in market volatility will expose such abuses in a dramatic fashion, giving credence to the Warren Buffet "time bomb" warning....<full report>

November 2006 | HOW WILL THE US HOUSING SLOWDOWN AFFECT OTHER MARKETS?
by William Sterling

In today's integrated world economy, investors are constantly challenged to connect the dots between economic developments in one region and market consequences elsewhere around the world...<full report>

October 2006 | BUYBACK MOUNTAIN
by William Sterling

Corporations around the world have dramatically improved their balance sheets in recent years. They have done this by taking advantage of stronger cash flow and lower interest rates to pay down debt or refinance existing debt at more attractive terms....<full report>

September 2006 | Old King Coal-The Best Hope for Energy Security
by William Sterling

At the height of the recent conflict in the Middle East, proponents of the “superspike” view that the price of oil will move beyond US$100 a barrel were feeling increasingly confident. Market participants were rightly concerned that an...
<full report>

August 2006 | The Other " Fed Model"
by William Sterling

Many investors are familiar with the so-called “Fed Model” that compares the relative value of stocks to bonds. Popularized by Wall Street strategist Ed Yardeni in the 1990s, the model compares the earnings yield on stocks (which is the inverse of the price-earnings ratio) to the yield on 10-year...<full report>

July 2006 | Inflation Expectations: Is the Fed Missing the Mark?
by William Sterling

The U.S. Federal Reserve has started paying a lot of attention to the concept of inflation expectations, so investors should be paying attention as well. The minutes from the May 10, 2006, meeting of the Federal Open Market Committee (FOMC), which were released at the end of May, referred to inflation expectations 11 times. <full report>

June 2006 | Sayonara to the “Strong Dollar”?
by William Sterling

Every word uttered by the new Federal Reserve Chairman, Ben Bernanke, is now scrutinized by the financial community for any possible nuance about the new Maestro’s thoughts on monetary policy. In the meantime, financial markets pay almost no heed to the thoughts of those, who but for a twist of fate, might otherwise be sitting in Mr. Bernanke’s chair. <full report>

May 2006 | Dealing with Divergences
by William Sterling

For a number of years we have made the case for why equity markets outside the United States are likely to outperform the American market as the world comes to terms with huge global trade imbalances. Our simple argument has been that there are a limited number of ways to reduce the U.S. trade deficit:
<full report>

April 2006 | The Iceman Cometh
by William Sterling

Ice was on my mind recently as I hacked away a thick layer of frozen H2O on my windshield. I am referring here not just to the wintry white stuff, but also to financial “ice.” In recent years, some Wall Street strategists have waxed poetic about “fire and ice” as major forces in financial markets, with “fire” referring to inflationary pressures heating up and “ice” referring to the opposite trend of deflation. <full report>

March 2006 | A computer looks at Canada
by William Sterling

Canada's stock and bond markets have delivered outstanding performance in the last few years, especially compared with other international markets whose returns suffered when viewed through the lens of the super-strong Canadian dollar. <full report>

February 2006 | The Dollar Debate

A year ago, market sentiment toward the U.S. dollar was extremely negative following nearly three years of erosion of the greenback's foreign exchange value. At that time, a number of prominent academic economists were publishing papers focusing on the unsustainable nature of the U.S. trade deficit and making the case for a further decline in the value of the dollar of anywhere from 30% to 50% over the next few years. <full report>

January 2006 | The Pause That Refreshes?

Global markets in 2005 were dominated by two main forces: commodity prices and the U.S. Federal Reserve. Markets that benefited from buoyant resource prices – like the Canadian market – did quite well. But the relentless upward march of U.S. interest rates meant that many other markets delivered lacklustre returns, whether measured in U.S. dollars or Canadian dollars.

And both dollars – the U.S. and Canadian – rose in value substantially against other major currencies like the euro and the yen.

Will these trends continue in 2006? <full report>

December 2005 | Will Dr. Bernanke Get along with Dr. Copper?

Financial markets enthusiastically welcomed the nomination of Ben Bernanke to replace Alan Greenspan as Chairman of the U.S. Federal Reserve Board. Dr. Bernanke's reputation as a brilliant monetary economist and savvy Washington hand make his confirmation a virtual certainty. <full report>

November 2005 | Is "Value" Overvalued?

Many money managers, including us, believe that the distinction between "value" managers and "growth" managers is somewhat artificial, despite its prevalent use among pension fund consultants and fund analysts. As Warren Buffet once said, "value and growth are joined at the hip." <full report>

October 2005 | How has Katrina Changed the Investment Outlook?

Our thoughts are with the hundreds of thousands of people who are suffering from the devastation that Hurricane Katrina brought to the southeastern United States. Unfortunately, a disaster of this magnitude may well have far-reaching economic and financial consequences as well. We are obliged to consider...
<full report>

September 2005
Meet the Fuggers

August 2005
Oil prices and Canadian versus World Stock

July 2005
Is Europe Kaput for investors?

June 2005
Valuation Check

May 2005
When will the Fed take a break?

April 2005
Waiting for Goldilocks

March 2005
What is "Fair Value" for the Canadian Dollar?

February 2005
Modest Expectations, Immodest Hopes

January 2005
2005 Outlook: The Greenspan Agenda

December 2004
The 51st State Weighs In

October 2004
Is Europe the Tortoise to the U.S. Hare?

September 2004
Oil Check: Are High Prices Here to Stay?