Report from the 51st Contrary Opinion Forum hosted by Fraser Asset Management
Comment of the Day

October 07 2013

Commentary by Eoin Treacy

Report from the 51st Contrary Opinion Forum hosted by Fraser Asset Management

Eoin Treacy's view Mrs. Treacy and I had a very pleasant time at this year’s event, conversing with delegates, many of whom are Fullermoney subscribers, and listening to the views of other speakers such as David Hale, Charlie Maxwell, John Moffatt, Bob Johnson, Jeff DeGraaf and others.

My presentation, entitled Paradigm Shifts, began by focusing on the need to change our perceptions of how to participate in the bond markets if, we are correct in assuming that the secular bull market in bonds is over. I then went through a number of the side effects rising yields are likely to have on other asset classes.

However, I also believe it would be a mistake to wholly focus on the negative impact of rising yields on the ability of companies to engage in financial engineering. The productivity gains coming down the line in terms of labour, urbanisation, energy, technology and healthcare suggest that the rising yield environment is likely to pose no more than a temporary hurdle in the course of what is likely to develop into a secular bull market for equities. Therefore while I expressed caution about the outlook for stock markets over the next year, I am a long-term bull.

Here is a pdf of my presentation.

One of this year’s most notable takeaways for me was how much the views of the presenters have changed in 12 months. In 2012, the consensus among the other presenters was that the debt ceiling and fiscal cliff represented a clear and present danger and that a stock market collapse was imminent. This year, despite the fact that the US government has closed down and that the fiscal cliff is once more on the horizon, the vast majority of commentators were bullish, some were in their own words “ultra bullish”. As someone who was expressing caution, this sounded a contrarian alarm.

I will highlight some of the additional comments from the other presenters at the Forum over the course of the week.

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