Oxstone Food for Thought – The Stock Market Roller Coaster Ride

12-Aug-2011

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A banker turned social finance entrepreneur. Liu-Yue built and managed two social enterprises to help make the world a better place. Liu-Yue co-founded Oxstones Investment Club a social financial education website that helps facilitate the exchange of ideas on emerging alternative investment opportunities along the new Silk Road (emerging markets). Liu-Yue also co-founded Cute Brands, Inc. – Cute and Happy with a Cause! Cute Brands is a cause-oriented, character-based brand licensing and social impact fund that creates social awareness on global issues and societal challenges through character creations, and also supports select charities (WWF, WCS, and ASPCA) through consumerism. A NYC native, Liu-Yue worked as an Executive Associate at M&T Bank in the Structured Real Estate Finance Group. Prior to M&T, he held a number of positions in emerging markets bonds and Latin American equities at SBC Warburg Dillon Read (Swiss Bank), OFFITBANK (the wealth management division of Wachovia Bank), and in small cap equities and special situation investing at Steinberg Priest Capital Management (family office). Liu-Yue has a Bachelor of Science in Finance and Marketing from the Stern School of Business at NYU, and an MBA specializing in investment management and strategy from Georgetown University. He also completed graduate studies in international management at the University of Oxford, Trinity College.







By Liu-Yue (Louie) Lam, Chief Investment Strategist, Oxstone Capital Management,    8/12/11

For the past few weeks stock markets around the world have shown extreme volatility. It will probably take some time before the markets settle down. So sit tight, and buckle up for more volatility ahead. One of my favorite investment gurus Jim Rogers once said, “I sell euphoria and buy panic.” Fear is opportunity. Conquer it and keep investing for the long term. Have a strategic asset allocation plan and stick with it. Leading economic indicators are not showing recession, just slower growth. This is a self inflicted political crisis. Expect the introduction of QE3 etc, and other monetary policy measures to support the markets. Global coordinated easing especially in the emerging market economies should provide additional stimulus. The current reduction in commodity prices including energy should act as a tax cut. The key question is whether the current extreme volatility and the temporary negative wealth effect of short term market declines enough to significantly impact our economic recovery? I think the U.S. economy is too large a ship to just change course so easily.

 

 

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