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Methodology
Blue
Marble Research employs a top down approach to the analytical process.
It’s unique approach to its analytical process and is an outgrowth of
the Market Forecast events conducted over the past decade by Vinny
Catalano. The ability to get “up close and personal” with many of Wall
Street’s finest strategists, economists, geo-political and topical
experts (see Events page), has enabled Vinny to learn and draw from
their knowledge, insights, and wisdom.
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An Integrated Global Thematic Approach
The
research methodology employed by Blue Marble Research (BMR) has evolved
somewhat since the publication of “Sectors and Styles”. It has taken on
a more multi-dimensional approach to investment strategy by integrating
a thematic analysis (mega trends and themes) with GEM.
GEM (government, economy, and the markets) begins with an analysis of
all things political and economic (the G & E of GEM). A concurrent,
yet distinct, analysis of the markets (M) takes place. The conclusions
reached in from each separate and distinct analyses is then compared
providing the input into
BMR believes that this blend of fundamental and technical analysis
is superior to each analysis done
separately without regard for each other.
A third concurrent part of the process is an identification and
analysis of key trends and themes that transcend any one business
cycle. This thematic analysis often provides the context within which
much of the GEM analysis takes place. One thematic example is
Globalization.
The final step in the investment strategy decision-making process is to
apply two core investment principles that BMR utilizes - Critical
Variables and Judgment - to the analysis completed thus far. BMR
believes that since investing is a social science, the markets function
in a state of dynamic change. Accordingly, the investment markets are
constantly shifting their focus and ascribing different aspects of GEM
and thematic issues greater or lesser importance. Through its
analytical process, BMR seeks to identify “what matters most” to the
majority of investors and, therefore, places greater or lesser
importance accordingly.
Since investing is a social science (unlike the physical sciences), BMR
believes that successful investment strategy requires careful judgment.
Applying What Is Learned
The application of our research is in the creation and maintenance of
what we call "Diversification with a Tilt".
Diversification with a Tilt, simply put, is an over, even, or
underweight decision process for each of the ten economic sectors, as
deconstructed from the S&P 500. Successful decisions made on a
sector and style basis enables BMR to achieve its goal of creating and
maintaining an effective portfolio (Model Growth Portfolio).
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