Report Detail Summary

Global Asset Allocation: The Skater Does Not Travel in a Straight Line

November 11, 2009

Our explanation for the cycles is that government policies can create “transportation and adjustment costs” that would prevent the complete equalization of valuation and, thus, the differences in levels shown in Figure 1. Also, changes in the “transportation costs” could either accelerate and/or retard the long run valuation convergence process. In fact, in some cases the policy actions may even temporarily reverse the natural equilibrating process.

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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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