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2018 Conference Key Takeaways

11.13.2018 | Ben Phillips, CFA

 

PAC 2018 Blog Image

 

Key Takeaways

 

  • Academic Insights: By observing the actions and voting behavior of “interested” legislators whose constituents and local firms are affected, we can gather insights into the likely impact of government legislation on firms. (Dr. Lauren Cohen - Harvard Business School) 

 

  • Trade Wars: Trade wars are a lot more powerful than tax cuts and deregulation. In addition, central banks are going to be a major factor in 2019 and 2020. These banks could be the tipping point for the next recession as they shrink their balance sheets.   (Dr. Sri-Kumar - Sri-Kumar Global Strategies) 

 

  • Infrastructure: Trump and the Democrats clearly align on infrastructure policy. Both are willing to spend a lot more money to get this done. They are aligned from not only a policy standpoint, but also a dollar standpoint. The question is: Will they be able to advance spending in the current increasing deficit environment? We are still positive on this and it could even be a slimmed down version. (Andrew Taylor - Political Alpha) 

 

  • Ongoing Trade Negotiations: Companies are starting to begin to hedge and prepare for the possibility that the trade problems with China will take longer than expected and are thus shifting their operations. The other issue is “entitlement” risk, which means that the longer tariffs are in place, the more they begin to have a natural constituency to keep them in place and not remove them.  (Paul Piquado - Former Assistant Secretary for Enforcement & Compliance at the U.S. Department of Commerce) 

 

  • Medicaid Expansion: All the Democratic victories at the governor level probably means as many as 4 and up to 8 states will expand Medicaid. Those plans look very robust. (Kim Monk - Capital Alpha) 

 

  • Monetary Policy: It should be clear that the Fed is never going to get to a normal balance sheet. They’re taking off tens of billions of dollars now and its already causing pretty significant market disruptions. It would take an inordinate amount of time to get back to a place where we removed all accommodation from the financial crisis.  (Jared Dillian - ETF 20/20) 

 

  • 2019 Policy Risks: In our view investors are overlooking the impact of trade negotiations on global growth. We think this is the biggest risk to the markets in 2019. We will be monitoring trade negotiations with China around the upcoming G20 Summit and into 2019.  (Ben Phillips - EventShares) 
     

 

 Note: These highlights are edited and paraphrased.
 
 

 

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2018 Conference Agenda

 
INTRO | What is Policy Investing?
Welcome to #PAC2018. Opening remarks from Frazer Rice, former Managing Director at Wilmington Trust and author of "Wealth, Actually", a book that shares Frazer’s holistic, adaptable approach to wealth management.
 
POLICY INVESTING | Evidence-Based Research
Join Harvard professor and NBER researcher, Dr. Lauren Cohen, in a discussion to learn about the academic merits of policy investing. Author of “Legislating Stock Prices” and numerous capital markets studies, Dr. Cohen noted in a 20-year study that a rules-based rotating policy investment strategy averaged +10% of policy alpha annually.
 
GLOBAL | Geopolitical Perspectives
Dr. Sri-Kumar, previously with Los Angeles-based TCW and a Senior Fellow at the Milken Institute, has spent an entire career analyzing the global geopolitical landscape and positioning tactical portfolios for major policy trends. Join in to hear his 2019 global policy outlook for developed and emerging markets and learn what changing U.S. policies mean for international investors.
 
INSTITUTIONAL | U.S. Policy Priorities
Managing Principal Andrew Taylor will outline the most significant market-relevant policy implications of the midterm elections as well as the U.S. trade outlook, with a particular emphasis on the current thinking of key Trump administration officials.
 
POLICY FOCUS | Global Trade
Paul Piquado, former Assistant Secretary for Enforcement & Compliance at the U.S. Department of Commerce, shares his outlook on U.S. trade negotiations in 2019. Paul previously oversaw the administration of the nation’s trade remedy laws and helped to ensure U.S. trading partners abided by their international commitments.
 
SECTOR HIGHLIGHT | Healthcare Policy
Healthcare is one of the most policy sensitive sectors in the United States. Healthcare companies comprise nearly 15% of the S&P 500, so it's critical for investors to understand the policy outlook. Join Capital Alpha's Head of Healthcare Policy, Kim Monk, in an insightful discussion about what 2019 and beyond means for U.S. healthcare.
 
2019 PORTFOLIO | Fireside Q&A
Author, ETF expert, and macro strategist, Jared Dillian, shares his views on positioning portfolios for a potentially volatile 2019. Hear how he’s recommending clients position their portfolios across global markets and assets classes.
 
POLICY ALPHA | EventShares Closing Remarks
Listen to EventShares’ CIO, Ben Phillips, discuss investing in legislative and regulatory policy catalysts. Ben will explore upcoming 2019 policy catalysts and how a policy alpha allocation fits in a diversified portfolio.
 
 
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