How to understand the current fluctuations of the markets ?
Sébastien Lalevée : Since mid-June, it is observed, with the acceleration of the commercial war led by Donald Trump, an increase in the stress on the european markets, in particular in the segment of small and medium-sized values. Since January, they have lost more than 15 %. Investors are deserting. This is the classic movement of flight-to-liquidity and safety, which today is accelerating in spite of the macroeconomic fundamentals which remain good. Evidence of this shift : the price of nickel, very speculative, collapsed, while that of the manganese, very related to the game of supply and demand, remains high. What is new is that the fluctuations are today amplified by the increased weight of passive management, on the markets. The trackers, the algorithms that buy when the market rises and sell when it is low. The behaviors become more instances of herd, which generates corrections more violent with falls in some sectors 30% to 40%, even as the outlook for corporate results are good. We saw it on the title Apple after a tweet from Trump. This is the case of semi-conductors, for example. The valuations have no impact. Today, we are in a market of flow, and more fundamental, and, in this environment, the job of a stock picker becomes more difficult.
there has always been a management replicating indexes ?
Yes, but was allowed to develop this type of management is too lax. The market is healthy when there are contradictions. However, insurance companies that invest with a long-term vision are gradually withdrawn from the market with the new prudential rules, leaving the market to hedge funds.
How do you adapt ?
You don’t change the process. More than ever people are looking for different stories, of recovery, but it does not increase in the decline. It is not necessary to be stubborn.
What have you learned ?
The second-largest operator global satellite and telecommunication SES Global, Air France for its new management, the possible output of the State of the capital and the future upgrading of its bank data clients, Soitec, Cellectis in biotech.
Should he renounce the shares ?
No ! Over a long period, the stock picking beats the indices. And there are periods more favorable. The publication of the results of the third quarter could open a new phase of the market where the micro-economy takes its place.
is it Necessary to prefer large values ?
there is less of a risk currently to opt for large caps, even if in the long term, the small promise of better performance. And their reduction provides entry points, such as in the company specialized in the laser Lumibird or the consulting company in digital Wavestone.