Global Investing

Tiger: potentially exciting and turbulent year

February 15, 2010

It’s the year of Tiger in the Lunar calendar. JP Morgan Asset management says the Tiger year opens with a bang only to peter out with a whimper — it is a year of fluctuating fortunes with people doing dramatic things, often on the spur of the moment.

tiger

“In short, it is a year of massive change, but it can also be a year to inject new life into a losing cause,” the asset manager says.

Here are some events that happened in previous Tiger years, listed by JPM:

1950: The (then) USSR claimed to have developed the atomic bomb, while the Korean War began with the North invading the South.

1962: Typhoon Wandda unleashed havoc in Hong Kong, while a border dispute escalated into the Sino-Indian war.

1974: A record number of tornadoes in the U.S., the IRA bombing of the UK parliament and the sudden resignation of Richard Nixon as the U.S. president at the height of the Watergate investigation

1986: The ousting of Philippines’ President Marcos, the assassination of Swedish Prime Minister Olaf Palme

1998: The Citigroup Travellers merger; Indonesian riots, and the LTCM/Russian crises.

“If 2010/11 were to be anything like an “average” Tiger year, then markets may well be volatile but could still end significantly up on the year. The average of the last six Tiger years suggests an index return of 13 percent for the S&P 500,” JPM says.

The firm’s quantitative analyst estimates that the Tiger is easily the most volatile year in the calendar, rivalled only by the Monkey.

Calyon says tiger is an animal traditionally expected to ward off the three main tragedies facing a household, namely fire, thieves and ghosts. “The financial markets could certainly do with something to ward off the fear factor which has taken hold, be it the trauma of Greece, Chinese policy tightening where the economy is too strong, or ongoing concerns about the lack of economic strength elsewhere. By rights, the news-flow and data flow in the coming week should provide support to the idea that we are entering a safer year, but sadly tigers are also known for their somewhat turbulent personality, much like financial markets of late,” it says.

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