The goal of the GAME conference is to fill the gap between what happens in the classroom and what happens in the real world of finance. -Dr. Sauer

Top 5 takeaways from Dr. Moore

1. Much like real estate agents, Wall Streeters tend to say it is always a good time to buy.
2. We need legal immigration for growth.  U.S. productivity not increasing and I suspect declining value applied to education and training is a major culprit.
3. Removal of U.S. from TPP was a big blunder.  It was an anti-China policy.  This makes the U.S. less important in Asia trade.   Brexit was a mistake like the TPP pullout. [3]
4. Analytical skills are critical to get a job.
5. Soft skills such as communication are lacking.  Can you communicate the truth with clarity?

Global markets panel

• Abbey Cohen?
  • Low unemployment data shows 2nd of 2016 was a period of accelerating economic growth globally and in the U.S.
  • Equity markets are fairly priced given the economic conditions. [1]
  • U.S. political policy creates uncertainty.  Inconsistent policy proposals by current administration, elections around the world, Brexit, all add to uncertainty.
  • Given the solid economic baseline, it will take a lot to unsettle markets, but they can be unsettled.
  • Bonds are overpriced around the world therefore rates are tools.
  • Rates are very, very, very low.  Even with a few raises, rates will be very, very low.  This won’t be a big damper on homes, cars, or other rate-sensitive sectors.
• David?:
  • U.S. economy has a supply-side problem.
  • Plain-vanilla investing won’t generate much return.
  • Don’t disregard Europe.
  • We have a healthy tortoise, not a sickly hare.
  • We don’t have enough workers and their productivity has not grown.
    • Baby boomers retiring in large numbers
    • U.S. economy can not grow further without legal immigration. [2]
    • We are at full employment.
  • Recommended portfolio warning label: past returns can harm future results.
    • Last 30 years 60/40 stock/bond portfolio -> 8%
    • Next x years 60/40 stock/bond portfolio -> 4%
  • Last year: Return of the Jedi
  • This year: Empire strikes back
  • Investing in Europe can add alpha
  • 30 year bond bull market
  • 8 year equity bull market
  • Stocks are a little high. [1]
• Ralph
  • Must be aware of what is going on outside of markets.
  • Wall Street loved Ronald Reagan.  Reagan/s honeymoon lasted 6 months (markets up 15%).
    DJM question: Was there also a George W. Bush honeymoon?
  • Many trends reversed course after repeal and replace did not occur.
  • Ralph raised his cash position after 1st policy failure.  May raise more.
  • Dow -27% in 1.5 years after Reagan/s honeymoon.
  • 3rd year is strongest in presidency.
• Abigail from Bloomberg
  • Need to look beyond equity markets.
  • Reinflation is being watched
  • Oil peaked then fell off
  • USD peaked then fell off
  • Bonds: 10 year yield rose from 2.05 to 2.30
  • VIX trading at all time lows for long time. [1]
  • Will oil remain low.
• David
  • Saudi is losing oil power.
  • Expectations of shale oil production is high.
  • Shale production can ramp up and down quickly.
  • Will see oil @ $40-$60 for a long time.
  • Where will Saudi Arabia be in 10 years?  Need to know this or think about this when considering an Aramco purchase.
  • When you buy a stock you buy a stream of earnings.
• Abbey Cohen
  • China accumulated cash largely as a result of U.S.
  • USD is a global reserve currency -> adds to China’s USD holdings.
  • China has a desire to be a global reserve currency, starting with a regional reserve currency.
  • Removal of U.S. from TPP was a big blunder.  It was an anti-China policy.  This makes the U.S. less important in Asia trade. [3]
• David on Brexit
  • Brexit, like the TPP pullout, is a huge mistake.
  • We need to educate voters.
  • Brexit is bad for Britain, not so bad for Europe.
  • Tariffs are bad:

  • An eye for an eye makes everyone blind. – Ghandi

  • Euro is like Hotel California.  You can check in but you can’t check out.
  • Brexit will be cautionary tale for the rest of the world.
  • Smart regulation is better than deregulation.
• Abbey Cohen
  • Little understanding of long-term improvement
  • Need immigration + education. [2]
  • 2 million unfilled manufacturing jobs: need more skilled workers.
  • Beware: short-term “goosing” of GDP growth may not help in the long-term.
  • Shortage of dollars spent on research.  We were at the top, now were are at the bottom of the top 1/3. [2]
  • Basic research down 30% in current administration budget proposals -> not investing in capital / people / research. [2]
  • Retail spending was low even though consumer confidence was up.
    DJM: Can those “confident” consumers actually spend?