WHITE SWAN WITH BLACK LEGS


The overall theme of this tome is agriculture. Hmm… not really something I can express an opinion on with any great knowledge. This edition of The Ghost in the Machine will, I’m sure, contain contributions from others who will illuminate and inform far better than I could ever hope to. I know, giving up the chance to analyse what is in effect ADM’s core business is perhaps an unforgivable dodge but I feel I can offer more if I stick to my brief.


Chart 1


So, horse racing it is then. Sadly the days are gone when burning the midnight oil with form books and speed figures gave me a command of that particular subject. Time constraints, age and admittedly a lack of enthusiasm means I am no more than a “selling plater” these days when analysing the sport of Kings. So it will have to be the day job. I will poke and prod around the equity markets to try and assess what has happened this year and what I feel could happen as we enter the last quarter.


Source: Bloomberg Chart 2


Let’s take a look at these two stocks. The graphs of this year’s price action has been compared with the US 10 year yield. Can you name these two stocks? I’ve left the prices on the right axis to make it easy. They are from the same sector and as you can see have had a pretty good year. I use these two names to illustrate one of the dynamics in equity markets this year. Both these stocks are dividend giants. They are both bond proxies that have benefited from one of the most severe pivots in Central Bank policy ever seen.


Source: Bloomberg


16 | ADMISI - The Ghost In The Machine | September/October 2019


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