Categories: Asia Pacific

Morgan Stanley: Firing the Last Round

To explain why, since initiation in late 2006, we have framed our market call by varying our equities weighting within pre-defined limits, a digression into Jonathan’s personal history may be relevant:

I would not be here if my grandfather had not avoided death by goring from a water buffalo in Kenya in the 1920s. These are, other than hippopotami, the most dangerous animals in Africa. They weigh well over a ton. He had a single-shot rifle with no time to reload. As it came thundering towards him, he had to stand his ground and wait to fire until it was within 20 yards, as he told it because the skull is so thick. The beast’s head ended up over his mantelpiece with the bullet hole clearly visible right between the horns, which were sharply pointed. The moral of this tale, as my grandfather made clear to me as a small boy, is two-fold. First, keep your nerve. Second, try not to get into a situation where you only have one shot to survive.

So, that’s why we – and we suspect most investors and asset allocators – vary our equities weighting rather than make binary market calls. One of the horns of the charging buffalo today is the EU sovereign crisis, whilst the other is fears of a China hard landing. Our views on both are discussed in detail below. However, having wasted two shots earlier in the year, with the buffalo now at 20 yards and closing, and with only 2% cash left in our asset allocation model, our judgment is that it has now come to the right time to – once again – fire the last bullet.

Reiterate thesis of the painful birth of the Asia/EM centric global economy

As in 2008, we reassert our belief that the general global macro-economic and financial market environment is characterized by the painful birth of the Asia/EM centric global economy. For more details, see in particular our December 2006 initiation piece, Taking Centre Stage: Five Themes and 2007 Outlook, dated December 11, 2006, and Third Transition in Global Manufacturing – Investment Implications, dated July 25, 2010.

Source: Asia Insight, December 2, 2011

CFI

Recent Posts

Digital Health’s Q1 2025 Unicorn Baby Boom: Investors Bet Big on Innovation

The first quarter of 2025 saw an unprecedented rise in the valuation of digital health…

15 hours ago

From Dubai Chocolate to AI: The Middle East in Transition

A sweet retail success in Dubai reflects a deeper transformation across the Middle East —…

3 days ago

Cube Labs: Transforming Scientific Discovery into Scalable Healthcare Innovation

Italy-based Cube Labs is redefining healthcare venture building by bridging the gap between academic research…

5 days ago

Filippo Surace: The Visionary Behind Italy’s Healthcare Venture Revolution

From surgeon to life sciences entrepreneur, Filippo Surace is charting a new course for healthcare…

5 days ago

Is the MBA Still Worth It? Weighing Value, ROI, and Leadership Impact

In an era of rapid disruption, does the traditional MBA still hold its weight? We…

1 week ago

Jefferies Trades Lone-Wolf Culture for Team-First Strategy in Bid for Wall Street’s Top Tier

For decades, Jefferies built its reputation as Wall Street’s maverick outpost — the last independent,…

2 weeks ago