11 April 2017: “Catastrophic consequences”

The last few days, attention of investors has moved away from tax reforms and interest rate cuts to the growing tension between North Korea and the US. President Trump ordered the USS Carl Vinson aircraft carrier and its battle group to waters off the Korean Peninsula. North Korea spoke of “catastrophic consequences”. Investors are becoming more and more nervous: the VIX shot up 20% in less than five trading days. How should they deal with this? As Warren Buffett would say: “Be greedy when others are fearful”. Is this the moment for investors to become more greedy? Or are things different this time, because under Donald Trump’s presidency everything is different?

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Investors approached earnings season cautiously yesterday. Mainly driven by energy stocks, markets closed marginally higher. The Dow gained 0.01%, the NASDAQ 0.05% and the S&P 500 0.07%. Due to tensions related to North Korea, volatility was on the rise. The VIX added almost 10%. UVXY ETFs followed suit and gained more than 7%. XIV ETNs lost more than 3%.
Danny Daredevil continued his winning streak and reached another all-time high: his RSS arrived at 444%. Adventurous Anny is still holding cash: her RSS was unchanged at 22%. Solid Suzy and Lazy Larry are paying the price of the rising volatility. Their RSS is just above zero at 0.87%.
None of our models gave a trading signal at the end of yesterday’s session.

Model Holds Start date

RSS

YTD

QTD

AAR

Danny Daredevil UVXY 1 January 2016

443.57%

34.84%

15.96%

277%

Adventurous Anny Cash 6 March 2017

21.78%

21.78%

0.00%

637%

Solid Suzy XIV 6 March 2017

0.87%

0.87%

-7.90%

9%

Lazy Larry
XIV 6 March 2017

0.87%

0.87%

-7.90%

9%

RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return

 

RS_v05-smallRené is working on a joint IT project involving companies from Germany, Belgium (Wallonia), The Netherlands, and the United States. Now that the targeted go-live date is rapidly approaching, clear and efficient communication between all participants is key. One might think that the fact that four languages are involved here (German, French, Dutch, and English) could lead to misunderstandings and a breakdown in communication, thereby forming a hindrance to success. But according to René’s perception, nothing could be further from the truth. Sure, there are as many different languages in the world as there are ways of doing business. Cultural differences can, and usually will, be a nuisance. But most of the times, albeit in retrospect, they appear to be blessings in disguise. Ethnocentrists aside, everybody will recognize the feeling that you get when you learn about the many surprising and clever ways other cultures tackle the same problems – ways that you would never have thought of, when focusing exclusively on your own culture. You just need to keep an open mind and a good ear.