Nouvelles et Publications

What would the grand seigneur of economic liberalism say about the ESG (Environment, Social, and Governance) trend in today's investment industry? This month's paper looks into the discussion about the "purpose of business" and puts Friedman's often misunderstood critique of Corporate Social Responsibility into perspective. Beyond that, we elaborate on our philanthropic activities, providing some information on the background and work of the L'Association Suisse pour la Recherche sur l'Alzheimer (APRA).

Rising credit spreads are considered a warning signal for equity markets. But how much forward-looking inference do they really allow? Are high-yield bonds the "canary in the coal mine", or do they merely correlate or follow equity markets? Our publication examines the historical relationship between junk bond spreads and the stock market in the United States and investigates whether spreads did indeed signal future drawdowns.

December and January are the months of investment outlooks. So we skimmed read quite a few 'year ahead' publications, summarised them and are now looking forward to reviewing this article again in 11 months. Generally, we note a surprisingly and somewhat concerningly strong consensus on the 2022 path of the world economy and its implications for equities and limited dispersion in the views on sectors and styles.

The Shiller P/E has long been advertised as a superior valuation measure. Now, this proliferate indicator has surpassed the psychologically important mark of 40x and is close to its last all-time high reached during the Dotcom bubble. Our article investigates what share buybacks may have to do with the structurally higher Shiller P/E observed since the turn of the century and what current levels imply for expected equity returns.