Articles By: Niels Jensen

Niels Jensen

Niels is a founding Partner of Absolute Return Partners LLP and its Chief Executive Partner. He is a graduate of University of Copenhagen with a Masters Degree in economics. He has 25 years of investment banking, private banking and asset management experience.

Here are my most recent posts

How to dress for a rainy day (of low nominal investing returns)

How to dress for a rainy day (of low nominal investing returns)

A typical portfolio will almost certainly not deliver the required returns over the next decade. If ‘typical’ means a 60/40 approach, as already mentioned, then 2-4% annualised returns are what can realistically be expected. If ‘typical’ means an entry into alternative investment strategies but only mainstream alternatives such as equity long/short and nothing else, you will almost certainly also end up short of your own expectations.

Read more ›
The ‘Perfect Storm’

The ‘Perfect Storm’

Going forward, equity markets are likely to have a much bigger impact on the economy than has been the case in the past. This is a simple conclusion derived from the fact that total equity market value today is 1.2x GDP. 35 years ago, when we entered the great bull market, total equity market value was only 0.4x GDP (the numbers are U.S.). No wonder the financial collapse in 2008 had such a dramatic effect on the economy.

Read more ›
Five Investing Themes That Need Further Examination

Five Investing Themes That Need Further Examination

Tiger 5 – Grexit is inevitable

Read more ›
Gauging the financial crisis end game

Gauging the financial crisis end game

It is quite possible that more than one end game will unfold in the months and years to come. For example, we could see a Greek Eurozone exit. Simultaneously, we could have a crisis unfolding across emerging markets, as the strong U.S. dollar begins to do damage to borrowers in those countries, of which there are many. Quite how it will all pan out is very difficult to predict. If I were a betting man, my money would be on the ‘permanent condition’ becoming the generally accepted view of the future economic environment.

Read more ›
Pie in the Sky

Pie in the Sky

We are still in a post-crisis environment, and enough people are still negative on equities, and interest rates are low enough, to provide plenty of purchasing power. We therefore expect it to be an ok period for equities over the next year or two – not outstanding given our modest growth expectations but ok. The trick is to be careful on emerging markets. If the U.S. dollar continues to be strong, it is an accident waiting to happen.

Read more ›
A Brave New World

A Brave New World

By Niels Jensen The Absolute Return Letter, December 2014 “The deepest sin against the human mind is to believe things without evidence.” Aldous HuxleyIn the the last two Absolute Return Letters I have argued why one should expect global GDP growth to be below average over the next decade or so, why interest rates should, as a consequence, remain low […]

Read more ›
Snail Trail Vortex

Snail Trail Vortex

The Absolute Return Letter, November 2014 “The single most robust and striking fact about cross-national growth is regression to the mean.”  -Lawrence Summers and Lant Pritchett Low growth is printed on the wall When financial markets capitulate, many investors lose the ability to keep things in perspective. That is a fact of life. Instead the little things take over and […]

Read more ›
Six Months of Nothing

Six Months of Nothing

Even if there are good reasons to believe that the prolonged rally can continue for a little longer, there are equally good reasons to believe that the current equity bull market may end in tears. I am not predicting a repeat of 2008-09. A much more modest decline, but still a decline, is a likely outcome at some point over the next 12-18 months.

Read more ›
A Century of Policy Mistakes

A Century of Policy Mistakes

Unless serious action is taken, Europe in particular (but the U.S. is not far behind) is at risk of falling into a very deep hole from which it may be extraordinarily difficult to dig itself out of. Once in, it will prove ever so hard to get out again. That is one of the key lessons learned from Argentina, even if the nature of Europe’s problems is different from those of Argentina.

Read more ›
Challenging the Consensus

Challenging the Consensus

Now, when I look at financial markets going into 2014, I cannot recall ever having come across a more one-sided view than the one which prevails. The consensus view on bonds is overwhelmingly bearish while pretty much everyone is bullish on equities – or at least they were until EM equities began to fall out of bed.

Read more ›
Are equity markets in a massive bubble?

Are equity markets in a massive bubble?

Niels Jensen: How to spot a bubble? Being closer to the exit point does not, however, imply bubble behaviour. Yes, there are signs of excesses creeping back in to the markets. however, I do not see much in terms of the classic signs of bubble behaviour – excess leverage, taxi drivers giving you his stock pick de jour, etc. etc. It is, after all, the most unenthusiastic rally I have ever experienced.

Read more ›
QE: Euthanasia of the economy?

QE: Euthanasia of the economy?

Over the past couple of years it has gradually become the consensus view that QE has failed because it hasn’t created the economic growth that everyone was hoping for. I find that view overly simplistic and naïve in equal measures. QE – or broadly similar monetary policy initiatives – has saved the world from a nasty and potentially very damaging financial meltdown not once, but twice – following the Lehman bankruptcy in the autumn of 2008 and during the depths of the Eurozone crisis in the second half of 2011.

Read more ›