January 2017 Commentary

As I outlined in our December 2016 commentary, I believed a lot of good news would be priced in the market by the time Trump took office on January 20th. Thereafter, reality would set in – the impact of the rising US dollar, clarity into what policies the new President would (or would not) be able to deliver upon, and renewed focus on the potential risks around the globe. For example, Trump talking tough on China and Mexico while cooing softly with Russia. As of January 31st, we still have no idea how these theatrics will play out; hence, markets are signalling a move from “Animal Spirits” to “wait and see mode”.

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Emma Querengesser
December 2016 Commentary

Happy New Year! I am excited that a new calendar year is underway for some of the following reasons: 

a)      During 2017, the Forge First funds will achieve five-year return numbers.
b)     2016 marks the 4th consecutive calendar year of positive net returns in our funds since August 2012 inception.
c)      Signs are pointing to a market where active management will add value relative to passive investing. Having the ability to offer investors the advantage of a proven shorting strategy heading into a year of macro challenges will be significant.

Looking back, 2016 was a year that featured four mini-cycles: the risk-off panic of January, the reflation rush of February through April, and a reversion towards a more balanced market from May to August, followed by a rotation among equities winning or losing from rising interest rates from Labour Day through year-end...

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Emma Querengesser
November 2016 Commentary

It would appear that the biggest theme of 2016 will end up being “conventional wisdom is wrong, bet against the consensus view”. From Brexit to inflation to OPEC to Donald Trump, we are living through a period that future generations will read about in history books. Going forward from November 9th, 2016, investing will require new thinking and different positioning. We stand at the end of years of easy and unorthodox monetary policy. We could be transitioning to a new fiscal world order, and when we think about all the wealth that has been created by zero and negative interest rate policies, we can’t help but think that things are about to change.

We are pleased to say that both funds delivered positive performance in November...

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Emma Querengesser
US Election Outcome - What's behind the Trump bounce and which sectors do Canadian investors need to watch?

I was not one of the believers, hence the news on Tuesday that Donald Trump and the Republicans captured a clean sweep (winning the White House and both sides of Congress) was a big surprise to me. Now the question becomes, what does it mean? The simple answer is we can guess, but it’s too early to know with certainty. Clearly, a Trump Washington, just like Brexit, will have longer-term implications that will only become apparent over time. In the short-term, how will Trump’s campaign rhetoric of ripping up NAFTA, erecting a wall between Mexico and the US, and reversing the policies of Dodd-Frank and Obamacare play out in real life? Approaching Election Day we had reduced exposure levels in each our two funds and layered on portfolio insurance...

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Emma Querengesser