I have been in the financial industry for about 7 years and am an avid market follower. I was born in sunny Miami and moved to Chicago in 2007. I am a University of Florida Alum and avid college football fan.
Why Macro?
I believe that in the end, corporate profits (the engine of stock market performance) are substantially affected by what goes on in the “bigger picture”, or the “Macro” backdrop. If one can properly analyze and solve the macro puzzle, he or she will be able to pinpoint sectors that would benefit from changes in the environment. Once the sectors are identified, then that is where fundamental, or bottoms-up analysis can be used to identify the strongest within the sector. However, I believe that the advent of sector ETFs makes up for this type of analysis. As a macro guy, my investing style focuses more on sectors instead of individual companies.
Things Learned in 2009:
Markets are profoundly shaped by gov’t actions and will be for a long time. Even if growth does not occur organically, the market doesn’t care. All it cares about is potential cash flow growth. I characterize this as a “moral hazard” premium. Investors have been trained to believe that the government will be there if there are economic troubles.
Another little secret: the economy only matters 25% of the time and thus analysis must be extended to sentiment, liquidity, and technicals. All of these factors must be taken into consideration to properly navigate the markets. The key is actually not forecasting economic outcomes, but instead the timing of your forecast.
I hope that the opinions and analysis on this weblog will help you look at things from a “top/down” perspective. They are more honed to the economy instead of where the markets will go from here, however I do add opinions and posts on market direction every now and then. Enjoy!
