Insights
Renewed easing by central banks worldwide was the defining move in financial markets during 2019, instigating a robust rally that left a number of major equity indexes at or near all-time highs by
Watch Matt McLennan alongside Evercore ISI's Ed Hyman as they discuss what has changed in financial markets over the last year and what that means for the US and Global economies.
Equity markets have overcome their end-cycle anxiety to deliver impressive gains thus far in 2019. Given the magnitude of returns across stock markets globally, it is perhaps not surprising to see widespread reports of FOMO among investors.
"If you're a long-term investor, it matters less what's happening to the markets as a whole, and matters more what you can find bottom up. At the end of the day, we're not betting on being all into markets. We're selectively buying into markets around the world and I think that's the key distinction."
The move down in long-term interest rates in recent quarters has shed an ominous light. We’ve seen the yield curve invert in the United States, and there is evidence of softening in the underlying economy. The manufacturing sector has been weak globally, and momentum in the service sector has started to fade.
As has been the case through much of the post-crisis period, investors in the third quarter generally saw bad news as good news: Signs of a slowing economy were deemed benign because they were likely to provoke greater accommodation from the Fed.
The gold price continued to climb in the third quarter of 2019, reaching a six-year high of $1,552/oz. in early September, as macroeconomic and geopolitical uncertainty continued to support the appeal of perceived safe-haven assets like gold.
The move down in long-term interest rates in recent quarters has shed an ominous light. We’ve seen the yield curve invert in the United States, and there is evidence of softening in the underlying economy. The manufacturing sector has been weak globally, and momentum in the service sector has started to fade.
The use of gold as a potential hedge against extreme market outcomes has long been a key tenet of First Eagle’s investment philosophy.
At First Eagle, we’ve long held that the United States does not have a monopoly on good companies. While we think most market participants would agree with this sentiment, asset allocation data suggest US investors in general continue to be significantly underexposed to international equities relative to their share of the global opportunity set.
As we assess the broader economic backdrop, we see plenty of worries. The US-China trade dispute remains tense, and there are signs that it has slowed global economic growth. Employment in the United States has been at a multi-decade high, but it may, potentially, have peaked.
“One of the things that's important that we do a little bit differently at First Eagle, is we don't define value just in purely statistical terms."
Though the current business cycle—the longest in US history—is showing signs of age, the potential timing of and impetus for its end remain uncertain.
Conventional wisdom dictates that everyone should save as much as they can, as early as they can, for as long as they can in order to live a dignified life in retirement.
The long-simmering trade dispute between the US and China has intensified in recent days.
Nurtured by ever-cheaper computing power and the datafication of modern life, the rate of advancement in technologies based on artificial intelligence (AI) and offshoots like machine learning has a
It’s by design that companies in Matthew McLennan’s portfolios aren’t exactly those that set investors’ hearts racing with excitement. “We’re happy to own businesses with what we consider a gradual positive drift to them,” he says. In this article, Matthew McLennan and Kimball Brooker describe how they assess “fade risk” in a number of industries, what makes them uneasy about the state of the world today, why their exposure to gold is higher than normal, and why they see mispriced value in Fanuc, Orkla, Schlumberger, Jardine Matheson and Weyerhaeuser.
The timing and conditions of Brexit remain unclear, but most estimates suggest that both the UK and EU economies will suffer as frictions are introduced into their economic connection.
Investors and consultants frequently ask for the Global Value team’s views on sustainable investing. While we do not offer strategies that focus in this area, we do pay close attention to issues of sustainability because they may be a key to a company’s resilience over the long term. Some investors see the energy sector as the antithesis of sustainability, but we see things differently. In this interview, Benj Bahr, energy-sector analyst on the Global Value team, explains why.
We cannot predict what will happen next in economies or markets, but 2018 had the feel of a transitional year. Volatility, which in our view, had been muted for an unexpectedly long period of time, returned in force during the year—first in February and then again in the fourth quarter.
First Eagle’s Global Fund marked its 40th anniversary on January 1, 2019. From the time that Jean-Marie Eveillard—a pioneer in global value investing—assumed leadership of the Global Fund, it has consistently employed a disciplined, benchmark-agnostic, value-oriented philosophy.
First Eagle’s Global Value team has adopted the value investment philosophy first developed by Benjamin Graham and later refined by Warren Buffett.
In this paper, we explain gold’s power as a potential hedge, examine its history, consider the advantages and disadvantages of bullion, gold stocks and ETFs, and explore the differences between hed
Since Joseph Engelberger, “the father of robotics,” developed the world’s first industrial robots in the 1950s and installed them in a General Motors plant in 1961, the robotics industry has made tremendous advances. Today, there are about 1.9 million industrial robots deployed worldwide across a wide range of applications in fields such as manufacturing, logistics, consumer services, defense and healthcare.
Income is a here-and-now need, but it also has a future dimension. Investors want to be sure of meeting their current financial obligations, and they want to be just as confident about funding future ones, as well. That is why the First Eagle Global Income Builder Fund seeks to generate current income while also providing long-term growth of capital. Our approach is based on three distinctive features: asset-class flexibility, global range and a focus on downside protection.
Rising volatility spurs many investors to sell indiscriminately and, in particular, to flee stocks they see as underperformers. This fear-driven flight may send share prices down into bargain territory, where value investors can acquire them.
Managers who are given the flexibility to go anywhere and own out-of-benchmark stocks and who make independent investment decisions, in our view, are more likely to outperform over the long term.
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