2014 — War and Peace

What’s notable about 2014?

Source: Multibriefs

2014 was a year of War and Peace. First, there were the personalities: Activists Bill Ackman and Carl Icahn declared a truce in their long fight over Herbalife; Amazon’s Bezos and Hachette books buried the hatchet over e-book pricing; Warren Buffett and Coca-Cola’s chief smoothed things over after the CEO’s bonus was cut in half. It needed to be: Buffett owns 10% of Coke, and the company hasn’t done so well. But hundreds of millions in bonus bucks couldn’t put Humpty together again at PIMCO. The Bond King—Bill Gross—lost his heir—Mohammed el-Erian—and then lost his Kingdom when he was pushed out.

Then there were the corporate tax-inversions. That’s where a US company merges with a foreign firm to move its tax-base offshore. Comedian Stephen Colbert likens them to an adopting a minority child and then claiming yourself as the child’s descendant. The list: Burger King / Tim Horton’s; Mylan / Abbot; Medtronic / Covidian; Salix / Cosmo; Nabors / C&J. Several proposed deals didn’t forward. The US Treasury’s fought the inversions with new rules. These may slow the pace of firms moving out, but they sure won’t bring new companies in.

Finally, there were the surprises: a price war in crude oil and a 40% drop in prices; a war on deflation in Europe led to lower long-term interest rates; North Korea hacked Sony Pictures; a third year of double-digit US stock market returns. But Argentina—in spite of a debt default and currency crisis—had the strongest local stock market of the year, rising 60 percent. Even in USD terms it’s up over 20%.

Source: Trading Economics

Predictions for 2015? That’s easy: expect the unexpected.

Douglas R. Tengdin, CFA
Chief Investment Officer
Phone: 603-224-1350
Leave a comment if you have any questions—I read them all!

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By |2017-07-17T12:23:08-04:00December 31st, 2014|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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