Markets in the 21st Century are fundamentally different from those of the 20th Century. Markets have been altered by computers, globalization, advancements in legal structures, complex regulations, derivatives, and other forces. Seagate Global has been at the forefront of changes in finance for many years. We not only understand and embrace changes in markets, in some cases we have helped make those changes happen, such as in China. We operate at the cutting edge of finance and markets because this is a strategy that works for us, and it is who we are.
We employ a disciplined holistic approach to modern markets that attempts to include all available information and tools. Some of the key points behind our approach include:
- Modern markets are the single most powerful tool to help improve the human condition.
- Focusing on what helps people and the planet can actually increase, not decrease, returns.
- Risk management is a key to consistent superior investment returns, starting with correctly defining risk.
- Early identification and entry into positively trending inefficient markets produces high returns.
- Aggressive global asset allocation between countries and asset classes is a key driver to superior returns.
- Markets are complex discount mechanisms. Different markets discount information differently. Some markets are more efficient than others. It is easier to produce superior risk adjusted returns in less efficient markets.
- Markets are a function of human nature which we consider in every investment
- Understanding a market's structure and the motivation and stimuli that cause the market participants to buy or sell in that market can provide an edge.
- The same type of market may operate differently in different countries based on culture, economic and other factors, making it necessary to adjust process for the country.
- Markets are organic, and evolve over time, therefore Seagate has a process that identifies fundamental changes in markets, and adjusts asset allocation and strategies accordingly.
- Seagate’s investment process is forward looking based on what we expect to happen, not backward looking based on historical information or models as many strategies are.
- Economic incentives work (tax policy, tariffs, regulations, supervision).
- The development of China is the single most important economic event of this era, thus we focus on our China relationships to provide Seagate with a competitive edge.
These factors are incorporated into a disciplined process or models that marry quantitative and qualitative factors. For example, in fixed income markets we use The Lawton Bond Model. The Lawton Bond Model has been expanded into a generalized investment model called the Lawton Investment Model which allows for the analysis of a variety of markets and instruments.