This week's interesting finds

Thoughts from the investment team 
Is the 40-year bull market in bonds over? Yields have officially hit the lower bound. In Germany for example, yields are flat year-to-date despite experiencing one of the worst economic shocks since WW2. German bond yields should be falling based on the deflation in the system. Here is the 10-year German treasury.

The crowd's stampede into "quality" or safety investments has made them very expensive while value has bounced. This trend is even more pronounced in Europe.

As long-only funds crowd into the “safe” trades, they are avoiding the undervalued stocks that stand to gain. Since the lows, in March most long-only funds have had a hard time beating their benchmark.

History shows that investors who are crowding into today’s crowded “safe” trades may also pay an opportunity cost by avoiding the undervalued stocks that stand to gain the most when the unwinding of “safe” strategies begins.

Large-cap stocks in the lowest quintile of beta are trading at historic high valuations.

Electric Vehicle penetration in China is back to pre-2018 levels
Perhaps it’s a function of the +60% drop in sales.   In a tough economy, people will not pay up for an EV. Car sales in China have recovered, but down 33% in the first week of April vs last year.

Howard Marks Memo: Knowledge of the Future
In this week’s memo, Howard Marks discusses the notion of making informed guesses regarding the future and shares questions about re-opening the U.S. economy. He also reviews the latest Federal Reserve moves to help the economy combat the coronavirus.