您好，新年快樂
This is Chinese for Hello and Happy New Year.
This New Year will be that of the Sheep (or Goat) as you may have
guessed.
The Chinese follow a bizarrely-modified Lunar calendar by also adding
one solar month in the equation (lunar months are only 28 days long). That
explains why the New Year day changes every year.
They have 12 animals symbolising the zodiacs: rat, cow,
tiger, rabbit, dragon, snake, horse, sheep, monkey, chicken, dog and pig.
People born in the years 1919, 1931, 1943, 1955, 1967,
1979, 1991, 2003, 2015 are sheeps.
If you do not know what sign you are, here it is*:
With a new year come predictions about everything and
believe it or not, about the markets.
A good macro-analysis should incorporate a few drivers such as:
-
Economic
-
Political
-
Sentiment
The sentiment indicators do not include, in general,
astrological signs.
But should we really care about the position of
Uranus?
Let’s have a quick look.
What can we expect in the markets according to our
Chinese friends?
Well, if you believe that astrology drives returns, then 2015 could be a
bad year, according to this chart by The Economist – note though that 2014 was
the year of the horse and it turned out OK with the Dow Jones delivering 7.5%
for the year.
2008 was
the year of the rat and equities plunged 40%. 2011 was the year of the rabbit
and equities were barely flat on the year.
2013 was
an excellent year, with the Dow up more than 20% and yet it was the year of the
snake!
Recent
years hardly seem to validate the Chinese visions.
Maybe we
need to look into more details because there must be more subtleties to this?
Looking for experts, I found that masters of Feng Shui could help us.
What
can a Feng Shui expert tell us then?
I am using the input of Doris
Ingber, an expert in Feng Shui, found in this interview here: http://fortune.com/2015/02/17/chinese-new-year-marketing/
·
“We
are at a turning point in the 12-year cycle,” says Ingber. “The energy of wood, which represents
the economy, is beginning to flower. Unemployment is down, wages are moving up, and costs have
stabilized or lowered.”
·
Ingber
says she left a career in fashion merchandising in 1999. “Now, I’m dealing with
the science of intuition, and use software programs for feng shui and
Chinese astrology to analyze information.”
·
Ingber
says portfolios should remain
diversified to produce steady growth. “Be cautious,” she says. “This is not a year for risk.”
·
She
explains that five elements (Wood, Earth, Fire, Metal and Water) affect
everyone, and that the energy of each element can relate to industries.
·
The
Chinese astrology expert says Wood industries should do well this year, as the element — which represents
growth and change — dominates 2015.
·
Wood
industries include architecture, manufacturing with natural products, fashion, food, publications like newspapers, magazines and books,
and education. “Those
who listen and communicate with their customers will thrive,” Ingber
says.
·
Earth
industries will be stable, consistent performers, including businesses that
deal with real estate, building, gas/oil, mining, insurance, accounting, law and human resources.
·
Fire
industries, she notes, are a safe bet, and include electricity/power companies, restaurants, the performing arts,
entertainment, military
and defense companies.
·
Metal
industries are weak, including banking,
technology (hardware),
automobile manufacturing, engineering,
and entrepreneurs or CEOs.
·
Lastly,
water industries are weak now, but are good investments for the future, she
says. Service providers, transportation, tourism, and health care practitioners will not have a great
year, but if businesses act with long-term gains in mind, they will show great
strength in 2019, the Year of the Pig.
The portfolio
created by Ingber would be looking like this:
-
Overweights
Energy
Consumer Staples
Utilities
-
Neutral
Consumer Discretionary
Industrials
Healthcare
-
Underweights
Financials
Technology
Telecoms and materials are not cited so I
cannot add them to Ingber’s portfolio.
You can compare to how you are positioned and make your own mind.
Does it mean we should rely on astrology to help
portfolios?
While famously John Pierpoint Morgan (the man who built JP
Morgan) had an astrologer on staff, apparently saying that "Millionaires
don't use astrologers, but billionaires do.", several studies have
failed to show that astrology-based returns were more than random events.
What it meant is that there is no proof that astrology adds
value. It is akin to a monkey picking stocks.
Furthermore, in 2007, the very aptly named Professor Wiseman
and The British Association for the Advancement of Science asked a
professional investor, a financial astrologer and a five-year old child to
invest a fictional £5000 on the FTSE100.
The investor chose shares on the basis of his experience,
the astrologer based her decisions on the ‘birthdate’ of companies and the
child chose her shares randomly.
The child lost the least amount of money and the financial
astrologer made the largest losses.
Conclusion
新年快樂again.
Astrology was not proven so far to be reliable in
forecasting markets.
However, it may have an impact on some market operators.
This is because investors are emotional and do not always rely on facts.
It can be useful to take into account any sentiment
indicator but never to have a single one as the deciding factor.
* My sign, the rooster, is characterised by the following:
With Roosters, what you see is exactly what you get. They
are very forthright and straightforward. The rooster likes to be noticed and flattered.
Roosters always appear attractive and beautifully turned out. They are
sociable and love to
receive attention. Believe it or not, it is not an easy task to fool the
Rooster. Their mind is cautious and sceptical, with this perceptive gift,
Roosters make excellent trouble shooters, detectives, doctors, nurses and
psychiatrists.
Roosters are always up, out and doing. They are also multitalented, and can
become accomplished in many different ways.
The best matches are with Snakes, Oxes and Pigs. Don’t be
shy.
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