下面的文章出自我们公司CEO Brad,不过其中的主题部分是我写的,比较简单地介绍了我对目前动荡市场的看法以及对我管理的基金所做的调整。事实上,我是自8月底才正式接手该平衡基金的管理,然后迅速行动,大手笔卖出了美国、国际等子组合,赶在股市下跌之前,快速降低了风险暴露。不过在另外两位同事管理下的加拿大股票组合部分行动较慢,在本轮加拿大股市崩溃中,没有完全避免损失。即使如此,整体投资组合损失不大,表现尚可称满意。

Incoming

by Brad Simpson & Edward Liu

Infectious Optimism was the title of the July edition of the Balanced View. The article was a plea to Canadian inventors to look beyond their past performance and realize that that the most prosperous period in Canadian economic history was perilously close to an end.

We hailed the warning, “Incoming”, the term used by soldiers in the field when they hear artillery shells in the air, a warning to comrades in arms to take cover.

Soldiers will tell you that incoming artillery shells make a whistle sound. The sound that lasts two or three seconds, like the ones in old war movies, are artillery shells that are not much of a concern because they land hundreds of feet away. The shells to be worried about are the ones that whistle only for a fraction of a second before hitting they hit the ground.

Soldiers recount that incoming shells that land close have a different sound than those that fall further a field. If the explosion is close, it makes a loud blast similar to someone hitting a sheet of corrugated steel with something heavy. The sound is less dense; more akin to a loud crack like breaking timber, the further away the explosion. If the shell does land close there is said to be a sudden outward movement of air and a sound wave of explosion. Immediately following the sound wave soldiers have shared the experience of hearing strange little noises overhead as the pieces of shrapnel tumble and twirl through the air.

During this post impact period everything seems surreal, time slows and then begins the process of assessing the damage and determining if another barrage is imminent.

We believe this is a good analogy for Canadian investors. We hailed Incoming because we could hear the shell closing in and in the seconds before it hit, we began to take cover as rapidly as possible. We did not succeed in escaping completely unscathed, but many others - professional and lay alike - who were caught in the infectious optimism of the moment and did not heed the call, are taking this full brunt of this market.

Now for the assessment:

Why did the Canadian market collapse?

 Overvaluation: With extraordinary performance over the past five years, the Canadian market was among the most overvalued markets of all developed countries.
 U.S. Connection: The Canadian economy, despite what the Asian miracle enthusiasts will tell you, is heavily influenced by the weak US economy.
 Oil: Oil prices and the Canadian dollar, the two predominant drivers of the Canadian market, have reversed the course making the value of the Canadian market more unjustified.
 Global retraction: Global managers are rapidly reducing their exposure to the Canadian market on the belief that the major trend supporting the bull market is close to an end. This was evidenced in the market movement Monday, September 8, 2008. When the global equity market enjoyed a robust rebound, the Canadian market suffered another heavy loss day instead; the global dealers have been big net sellers of the Canadian market at this time.

What have we done?
 Since late Spring 2008 we have been concerned about the potential risks inside the Canadian market and we began to reduce our Canadian equity exposure in favour of other markets and asset classes.
 We sold our entire US long-only portfolio before the market collapsed.
 We also sold our entire international equity portfolio before the market collapsed.
 We increased our cash position to more than 30% at the end of last week.
 We brought down the net market exposure in our growth portfolio to 10%, our minimum and lowest level in our history.
 We diversified our asset mix by building up positions in US real estate and through buying battered down commodity Exchange Traded Funds.

The present asset allocation of our True Balance Portfolio is as follows:

What has happened since?
 Between September 2nd to 9th, the TSX lost 1,600 points and 11.8 percent within 6 trading days.
 Our 30% allocation to cash during this period effectively decreased our risk exposure in such a brutal environment.
 The real estate and ETF positions have proved to be the best performing asset classes in the market melt down.
 Our growth portfolio is also performing quite well on a relative basis.
 Unfortunately, we still hold a 25% exposure in Canadian equities which have suffered along with the TSX index.
 Our external managers, Picton Mahoney and Vertex One have been sorely tested; the former to a far lesser extent due to their absolute return strategies. Vertex One is one of the best managers there is and continue to have our utmost confidence.

As a result, as of market close on Thursday we have lost an estimated 2.6% over the past two weeks in the value of our TrueBalance portfolio. However we can say with confidence that it would have been much worse had we not made the preemptive moves discussed above. We are not happy with any losses our clients have suffered, although our portfolio has performed much better than many indexes and a good deal of our peers.


What are our next steps?
 We will continue to take cover and reduce our Canadian equity exposure in a timely fashion until we reach our target allocation of 10%.
 We will continue to build up positions in short duration bonds, primarily through ETFs.
 We will build up our international equity positions inside of the Growth portfolio. We will maintain our net market exposure at or near the minimum (10%) level as we do not expect the market to deliver healthier performance until as late as the first quarter of 2009.
 We will continue to diversify our portfolio through adding strong external managers and expanding our alternative strategies, specifically in private capital, trading strategies and real estate.

At Barlow we believe this is the beginning of the end of arguably the strongest period in Canadian economic history. We are not being alarmists, there are still many positives for our economy and our markets, but the era of perfection has come to a close and the concepts of risk and volatility have returned to the investment equation. We believe this is a perfect environment to employ the endowment style of investment management because it lower risk and will provide consistent returns to our investors.