Author: hfoelsing

14^th July 2016

It is legally possible for the EU to split up into its constituent countries, but – as Britain is finding out – the process is laborious and complex, needing several years. More to the point, for almost all EU members there are major economic advantages to staying inside.

These advantages are obvious to all the smaller members, such as Greece, Cyprus, Latvia, Romania and Portugal. They are net winners in the EU’s subsidy games, as is clear in Chart 3 showing countries’ net contributions per capita… read more

29 June, 2016

Marcel von Pfyffer joins Switzer TV to reveal how he intends to play the market following the Brexit vote last week.

29th June, 2016

Arminius’ global macro hedge fund recorded a modest positive return on the Brexit vote, even though we do not make bets on political events. We invest our clients’ money on the basis of quantitative statistics about the market, and our quantitative models told us in mid-May that risk in global markets was too high. Therefore we shifted 95% of our fund to the safe haven of cash, which is where it will remain until at least 01 July. As a result, we have avoided the market falls which followed the Brexit vote, and the Fund made profits on some market neutral short positions in the US equities market.

The Brexit vote has triggered a regional crisis, not a global crisis… read more

28th June, 2016

To be clear, not everyone had an uncomfortable Brexit. What is being referred to now (and no doubt in case studies at Harvard in years to come) as “Black Friday”, was in fact quite a Good Friday for investors in Arminius’ global macro hedge fund.

So how did we manage to not lose money through Brexit? By obeying our models.

… read more

Every diligent student in Economics 101 learns how to use supply and demand curves to show that legislating for minimum wage rates tends to reduce total employment… …what these diligent students don’t know yet is that the real world is often reluctant to behave the way that economic theory says it should. Supply and demand curves are theoretical abstractions, and the straightforward conclusions of economic theory depend on several simplifying assumptions which usually aren’t true in the real world… …in recent earnings guidance from US retailers and restaurant chains, management has suggested that rises in the minimum wage will cut CY2016 profits by 2% to 3% and CY2017 profits by 3% to 4%… [see more]