Beware the Ides of March

A strategy note for March 2023

“Beware the Ides of March” is a quote from Shakespeare’s famous tragedy, Julius Caeser. It refers to a warning from fortune-teller about the 15th of March, the day when Caeser was assassinated.

While seemingly a grim way to start this note, it happens to be quite apt. We’re still very much in a bear market and the Macro, while confusing to some, is quite clear. So are the fundamentals. But, that doesn’t mean we can’t have a strategy to navigate these markets.

I wrote my strategy for the year here, in December and Asset Allocations for the Quarter here, in January. And my aim with these newsletters, are to provide updates on the data to give you a sense of where we are headed.

And the data, does fit in with the overall yearly strategy but, there have been a few interesting developments that we’ve covered in the last couple of months. These caused the market to rally and bring about a very risk-on feeling:

• Short Covering Rallies particularly in Unprofitable Companies and Tech names (Feb 05, 2023)

• Increased levels of options activity, particularly same-day expiries (Guest post by my partner, Markets & Mayhem Jan 21, 2023)

• Additional liquidity entering the system from Japan and China (Mar 01, 2023)

• The re-acceleration of inflation - which I’ve covered in multiple articles discussing wage price spirals, and oil spikes - a summary here (Jan 12, 2023)

Read on for what we’re seeing in March and what our strategy looks like.