Focus on the capital flows - The core of global macro investing

 

The whole world is simply nothing more than a flow chart for capital.

Paul Tudor Jones

Perhaps an exaggeration, but it is not far from the investment truth. Global macro managers are not a strategy classification but a way of looking at the entire globe as an opportunity set based on money seeking opportunities. The flows across the globe, regardless of asset class, will drive prices. You may be a trend-follower, but the markets are impacted by global flows even if you do not track the flows. You can be a value manager, but the hope is that global flows will move to cheap stocks after you have placed your positions. 

• Treasuries - It's a global market based on seeking yield.
• Equity indices - It's a global market based on best return to risk. 
• Currencies - Foreign exchange is global trade and capital sensitive. 
• Commodities - They are driven by global demand which moves commodities from producers to users. 
• Credit - The choices are based on global opportunities for relative risk.

The global macro manager who is not a global flow junkie will not likely last long in the markets.