Notes from the Morgan Stanley Investment Leadership Conference which took place on the 28th of June, 2018.
The panelists for the first discussion were:
- David Craigen, Partner at Lansdowne Partners
- Joshua David Samuelson, Vice Chairman at PointState Capital
- Robert S. Pitts, Limited Partner at Steadfast Capital Management
To begin with, David Craigen, Partner at Lansdowne Partners recommends:
Taking more short positions on Europe. This is based on the information that the European Central Bank is expected to keep the interest rates steady and will hold ultra-easy monetary policy. The interest rates are not expected to rise for a long time in the future.
The economic growth and development, including the GDP, is expected to be dispersed regionally. For instance, the domestic market in Turkey is almost uninvestable due to the full-blown currency crisis. Along with Turkey, the financial and utilities segment in Italy also remains a poor proposition for investment due to the hostile political environment.
The officials of Lansdowne Partners have had meetings with the new office-bearers in the new government of Italy and have learnt that the Italian government wants the debt owed by Italy to the European Central Bank (ECB) be written off and wants to incorporate a new voucher system as an alternative currency to work on negotiations with Germany and France.
The short position is also due to the fear that the Euro Zone’s probability of breaking up is highest now, since 2010. The market is very fragile and has not completely factored in the disturbances that can be caused by the conflicts expected in Europe. Mario Draghi, the President of European Central Bank and Angela Merkel, Chancellor of Germany are both feared to be gone soon.
However, Lansdowne Partners recommends to go long on residential and commercial real estate in Ireland. The replacement cost of the houses in Dublin is currently 1.8 times that of those in the U.K.
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