Report Detail Summary

Around the World in 90 Days : Part I

December 01, 2020

We believe that President Biden will take a dirigiste approach. He will try to regulate and provide directives to “guide” economy and thereby “improve” shareholder capitalism by persuading the corporations to adopt ESG type policies. The Biden administration will also adopt targeted benefits and taxes aimed at improving the distribution of income. All these policies will increase the regulatory burden of companies and reduce the incentives to produce and invest. And this brings us to an investment implication. Our research shows that when inflation , tax rates and regulations increase the small capitalization companies tend to outperform the large capitalization companies. Hence, we look for the smaller cap stocks to close the gap and or outperform the larger cap stocks during the Biden Administration. The one significant difference arising from the scenarios that we have discussed is the magnitude to the returns.

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The ValueTiming™ strategy is based on the assumption that politicians and policymakers have particular views of the world, and that they will in general adopt policy measures that are consistent with these views.


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