Morgan Creek Memo to Clients on The Great Rotation

Morgan Creek Memo to Clients on The Great Rotation

Morgan Creek sent out this presentation to clients last night on the Great Rotation from bonds to equities. Morgan Creek is an alternative asset manager with $7 billion under management, run by Mark Yusko. We have not done one piece on the “Great Rotation”, but found this one to be informative. Mark Yusko gave a presentation recently in which he had an extremely bearish view on the economy: This presentation from Michael P. Hennessy, director of investments at Morgan Creek is slightly more optimistic. Michael believes that bonds could see an exodus and equities appear attractive in comparison. However, Michael is more cautious about the Great Rotation than many other experts.

He notes that if the economic growth remains tepid the Fed could introduce more easing. Further easing is  likely to push down bond yields. Europe appears to have bottomed in his opinion, but Michael sees the potential for a currency war.  Finally, Mark Hulbert that 1987 began with a “Great Rotation”, but then saw the largest stock market crash in October.

Relying On Old-Fashioned Stock Picking, Lee Ainslie Reports His “Strongest Quarter” Ever

Lee Ainslie's Maverick Fund USA enjoyed its "strongest quarter in the fund's history" during the three months to the end of June. According to a copy of the firm's second-quarter letter to investors, which ValueWalk has been able to review, Maverick Fund USA gained 18% in the second quarter. Following this performance, the fund was Read More


The full presentation from Morgan Creek is embedded below:

MCCMThoughtPieceGreatRotation.March2013 by ValueWalk.com