Titan Investment Partners first fund overview PDF’s out

As I write (27 July 2013), it looks like the worst of the sell off seen in mining and gold mining stocks has now passed. During the month of June alone, the benchmark (the ARCA Gold Bugs Index in $’s) that this fund is set against fell by almost a quarter going into the last trading day of 2Q before closing up sharply on that day. By any measure, coming on top of the returns set detailed below, this ranks as one of the most severe sectoral sell-offs seen since the crisis of 2007-09.

At Titan, we believe that real outperformance is driven first and foremost at the asset allocation level and historical evidence shows time and again that when sectors have been out of favour for a good period of time (typically 2-3 years), they are generally in the vanguard of positive returns in subsequent years. To read the remainder, click the image above or here – http://www.titanip.co.uk/wp-content/uploads/2013/07/PREC-METALS-PDF.pdf

Although rather more acutely within the gold mining specific sector, the wider mining stocks spectrum has had a difficult 2 years to say the least, as evidenced by the table below which displays very succinctly the pain holders of equities here have suffered.

This magnitude of underperformance (almost 50%) against the wider global equities sphere, certainly over a 2 year period, generally acts as a level from which a sharp rebound takes place. Indeed, this poor performance actually masks some real shockers. Right throughout the market cap spectrum numerous large and mid cap stocks are in fact down in excess of 70% over this 2 year period, and certain small caps almost 90%.

The performance of the sector is all the more surprising however, as QE was supposed to be supportive of commodities in general. This line of thinking has well and truly broken during the last 18 months though, with gold declining by almost a third and most other commodities also down sharply from their peaks. To read the remainder, click the image above or here – http://www.titanip.co.uk/wp-content/uploads/2013/07/Titan-Nat-res.pdf

At the time of writing (25 Jul 13), we are now 4 years and 4 months into this bull run. The actual duration of the average bull market (US markets) since the 1950 is just over 5 years and so on this measure, we have until spring of next year still to go if the market proves typical of past performances (disclaimer – past performance is not guarantee of future performance!). More interestingly to us however, is the fact that the historic record shows that the average bull market return has been 164%. On this measure, again if the S&P 500 conformed to its average of the past, then the S&P 500 would top out just shy of 1800.

While it is true that bull markets usually finish in “blow off tops”, something that it has to be said has not been evident thus far, one of the other ingredients that general typify their final throes is increasing public participation. It is thus an ominous sign to us that in the US, equity market inflows into equity mutual funds have just reached the largest level since the dotcom boom in early 2000. There are also few commentators and analysts around at present who are calling the market down. With stretched valuations thrown into the mix, certainly on the only real measure that works over the long term – the CAPE ratio (Cyclically Adjusted Price Earnings), and a real conundrum on the Fed’s part as to how they finally do exit their ZIRP and QE policies, we’d sooner sit on the side of caution here than chase beta right at the last stage. To read the remainder, click the image above or here – http://www.titanip.co.uk/wp-content/uploads/2013/07/Global-Macro-PDF.pdf