Corrado Bogni had less than 24 hours to get the diamond to Hong Kong. He would give up his Christmas Eve to accomplish the mission if need be. Still, could he find a last-minute flight out of London during one of the busiest travel times of the year?
It was 2006. A desperate hotel guest who frequented the five-star Connaught hotel in Mayfair trusted Bogni more than anyone else in the U.K. capital, because it is the pledge of the luxury hotel concierge to accomplish anything necessary, whenever necessary—no questions asked.
Welcome to the high-stakes world of concierges in the world’s leading luxury hotels.
“There really are only two rules to serving as a concierge,” Bogni says, recalling his journey to China and back. “We cannot get you drugs or ‘companionship.’ Other than that, we’re paid to get anything done without the guest having to worry about how we do it.”
The familiar Connaught guest would be working out of Hong Kong for the holidays and wanted to get a special cut of a glittering yuletide gift to his beloved in the Far East before Christmas Eve. The diamond needed to be picked up in Belgium and transported to the Connaught in Hong Kong, so the guest could present it under the Mistletoe faster than Santa could drop it down a chimney.
Bogni explains he took it as an honour that the generous client would entrust him with such a valuable trinket. “He was a well-known guest who asked for help,” Bogni says. “My approach as a high-level concierge is always to say ‘yes’ to a request and then find a way to make it happen via my personal endeavours and with the help of many fellow concierge colleagues around the world.”
Bogni, who has since taken a job at the luxury golf community Les Bordes in France, insists his peers rely on each other with growing frequency in the post-pandemic world. According to Andrew Sturge, head concierge at the London boutique hotel Flemings, Covid-19’s aftermath means supply shortages, business closures, transportation problems, and other snags that often hinder a concierge in sourcing whatever he or she needs.
“We (concierges) began relying on each other for ideas on how and where to source anything we need,” he says from the Flemings’ front desk. “We formed a new, unofficial network of support with our cell phones almost becoming walkie-talkies texting and calling back and forth. All that matters is getting what our guests need as quickly as possible.”
Like all of his peers sending their requests across the new network, Sturge wears the Golden Keys, or Les Clef d’Or, on his lapel. Anyone who wears the pin has completed a five-year stint as a concierge before undergoing an application and approval process lasting about five months, according to fellow member Simon Thomas of the elite Lanesborough Hotel near Hyde Park.
With his own Golden Keys on display, Thomas and his Lanesborough colleagues confront a sea of requests on a daily basis. “One of our regular guests was a roller skate champion in the U.S. who wanted to have a space to practice,” Thomas says. “We created a huge roller skate rink in our ballroom.”
Thomas also cites “Parrot Gate”—the quest to acquire an African Grey parrot for a birthday present in less than 24 hours, complete with lessons on how to care and train the bird for the surprised recipient.
Giuseppe Pesenti, head concierge at Badrutt’s Palace high atop St. Moritz confirmed that the developing concierge network spread over all of Europe, with professionals turning away from rivalry and toward cooperation.
“We have a very close relationship with all the Golden Keys members as we are all very good friends,” Pesenti says. “Of course, we are in a competition, but it is friendly competition with respect and gratitude.”
Pesenti tells a story of a family hoping to organise a boat excursion to Italy’s Lake Como and a small restaurant on Comacina Island (about 60 miles from Badrutt’s Palace).
“Unfortunately the restaurant had been closed for two years and then looked abandoned,” Pesenti explains. “My colleague Augusto and I are originally from Lake Como. Since we wanted to surprise the guests, we arranged to clean the terrace outside of the restaurant and sent a driver from St. Moritz with food and a waiter. Once the boat captain approached the island to find the restaurant ‘open,’ our guests called right away to express their happiness.”
‘The Shirt off My Back’
Away from the resources of cities and luxury enclaves, David Rutherford serves as concierge and as a sort of “guest needs ombudsman” at Dundonald Links in Ayrshire, in western Scotland. He says golf guests come to him in desperation when airlines lose their gear and transportation fails them.
“I have very literally given guests the shirt off my back and the shoes off my feet,” Rutherford says. “I’ve let them use my golf clubs to play their rounds and my car to get them back and forth between courses.”
Rutherford insists those in need don’t come to him with a sense of entitlement or impatience. They’re people with problems in a region where resources are limited.
“My job is to get them what they need when they need it so they can enjoy themselves as much as possible,” he says.
Back in France, Bogni remembers London flights were booked solid as the hours until Christmas Eve ticked away with the diamond still in his care. Making matters worse was the heaviest December fog the U.K. had seen in years.
“I travelled by road from London City Airport to Antwerp to pick up the diamond—then back the same evening to catch one of only two flights that left that day out of Heathrow due to fog,” Bogni recalls. “I flew to Hong Kong, and a driver took me on arrival from the airport to the Mandarin Oriental Hotel.”
Bogni delivered the diamond to his guest, visiting for not more than ten minutes, and returned to the Hong Kong airport to board the very same aircraft that brought him to China.
“I left on the 22nd of December, and I returned to London on the 23rd,” Bogni says. “After all, I had concierge duties at a major hotel in central London waiting for me.”
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Equities are often seen as expensive after promising start to 2023
A new trading year kicked off just weeks ago. Already it bears little resemblance to the carnage of 2022.
After languishing throughout last year, growth stocks have zoomed higher. Tesla Inc. and Nvidia Corp., for example, have jumped more than 30%. The outlook for bonds is brightening after a historic rout. Even bitcoin has rallied, despite ongoing effects from the collapse of the crypto exchange FTX.
The rebound has been driven by renewed optimism about the global economic outlook. Investors have embraced signs that inflation has peaked in the U.S. and abroad. Many are hoping that next week the Federal Reserve will slow its pace of interest-rate increases yet again. China’s lifting of Covid-19 restrictions pleasantly surprised many traders who have welcomed the move as a sign that more growth is ahead.
Still, risks loom large. Many investors aren’t convinced that the rebound is sustainable. Some are worried about stretched stock valuations, or whether corporate earnings will face more pain down the road. Others are fretting that markets aren’t fully pricing in the possibility of a recession, or what might happen if the Fed continues to fight inflation longer than currently anticipated.
We asked five investors to share how they are positioning for that uncertainty and where they think markets could be headed next. Here is what they said:
‘Animal spirits’ could return
Cliff Asness, founder of AQR Capital Management, acknowledges that he wasn’t expecting the run in speculative stocks and digital currencies that has swept markets to kick off 2023.
Bitcoin prices have jumped around 40%. Some of the stocks that are the most heavily bet against on Wall Street are sitting on double-digit gains. Carvana Co. has soared nearly 64%, while MicroStrategy Inc. has surged more than 80%. Cathie Wood‘s ARK Innovation ETF has gained about 29%.
If the past few years have taught Mr. Asness anything, it is to be prepared for such run-ups to last much longer than expected. His lesson from the euphoria regarding risky trades in 2020 and 2021? Don’t count out the chance that the frenzy will return again, he said.
“It could be that there are still these crazy animal spirits out there,” Mr. Asness said.
Still, he said that hasn’t changed his conviction that cheaper stocks in the market, known as value stocks, are bound to keep soaring past their peers. There might be short spurts of outperformance for more-expensive slices of the market, as seen in January. But over the long term, he is sticking to his bet that value stocks will beat growth stocks. He is expecting a volatile, but profitable, stretch for the trade.
“I love the value trade,” Mr. Asness said. “We sing about it to our clients.”
Keeping dollar’s moves in focus
For Richard Benson, co-chief investment officer of Millennium Global Investments Ltd., no single trade was more important last year than the blistering rise of the U.S. dollar.
Once a relatively placid area of markets following the 2008 financial crisis, currencies have found renewed focus from Wall Street and Main Street. Last year the dollar’s unrelenting rise dented multinational companies’ profits, exacerbated inflation for countries that import American goods and repeatedly surprised some traders who believed the greenback couldn’t keep rallying so fast.
The factors that spurred the dollar’s rise are now contributing to its fall. Ebbing inflation and expectations of slower interest-rate increases from the Fed have sent the dollar down 1.7% this year, as measured by the WSJ Dollar Index.
Mr. Benson is betting more pain for the dollar is ahead and sees the greenback weakening between 3% and 5% over the next three to six months.
“When the biggest central bank in the world is on the move, look at everything through their lens and don’t get distracted,” said Mr. Benson of the London-based currency fund manager, regarding the Fed.
This year Mr. Benson expects the dollar’s fall to ripple similarly far and wide across global economies and markets.
“I don’t see many people complaining about a weaker dollar” over the next few months, he said. “If the dollar is falling, that economic setup should also mean that tech stocks should do quite well.”
Mr. Benson said he expects the dollar’s fall to brighten the outlook for some emerging- market assets, and he is betting on China’s offshore yuan as the country’s economy reopens. He sees the euro strengthening versus the dollar if the eurozone’s economy continues to fare better than expected.
Stocks still appear overvalued
Even after the S&P 500 fell 15% from its record high reached in January 2022, U.S. stocks still look expensive, said Rupal Bhansali, chief investment officer of Ariel Investments, who oversees $6.7 billion in assets.
Of course, the market doesn’t appear as frothy as it did for much of 2020 and 2021, but she said she expects a steeper correction in prices ahead.
The broad stock-market gauge recently traded at 17.9 times its projected earnings over the next 12 months, according to FactSet. That is below the high of around 24 hit in late 2020, but above the historical average over the past 20 years of 15.7, FactSet data show.
“The old habit was buy the dip,” Ms. Bhansali said. “The new habit should be sell the rip.”
One reason Ms. Bhansali said the selloff might not be over yet? The market is still underestimating the Fed.
Investors repeatedly mispriced how fast the Fed would move in 2022, wrongly expecting the central bank to ease up on its rate increases. They were caught off guard by Fed Chair Jerome Powell‘s aggressive messages on interest rates. It stoked steep selloffs in the stock market, leading to the most turbulent year since the 2008 financial crisis. Now investors are making the same mistake again, Ms. Bhansali said.
Current stock valuations don’t reflect the big shift coming in central-bank policy, which she thinks will have to be more aggressive than many expect. Though broader measures of inflation have been falling, some slices, such as services inflation, have proved stickier. Ms. Bhansali is positioning for such areas as healthcare, which she thinks would be more insulated from a recession than the rest of the market, to outperform.
“The Fed is determined to win the war since they lost the battle,” Ms. Bhansali said.
A better year for bonds seen
Gone are the days when tumbling bond yields left investors with few alternatives to stocks. Finally, bonds are back, according to Niall O’Sullivan of Neuberger Berman, an investment manager overseeing about $427 billion in client assets at the end of 2022.
After a turbulent year for the fixed-income market in 2022, bonds have kicked off the new year on a more promising note. The Bloomberg U.S. Aggregate Bond Index—composed largely of U.S. Treasurys, highly rated corporate bonds and mortgage-backed securities—climbed 3% so far this year on a total return basis through Thursday’s close. That is the index’s best start to a year since it began in 1989, according to Dow Jones Market Data.
Mr. O’Sullivan, the chief investment officer of multi asset strategies for Europe, the Middle East and Africa at Neuberger Berman, said the single biggest conversation he is currently having with clients is how to increase fixed-income exposure.
“Strategically, the facts have changed. When you look at fixed income as an asset class…they’re now all providing yield, and possibly even more importantly, actual cash coupons of a meaningful size,” he said. “That is a very different world to the one we’ve been in for quite a long time.”
Mr. O’Sullivan said it is important to reconsider how much of an advantage stocks now hold over bonds, given what he believes are looming risks for the stock market. He predicts that inflation will be harder to wrangle than investors currently anticipate and that the Fed will hold its peak interest rate steady for longer than is currently expected. Even more worrying, he said, it will be harder for companies to continue passing on price increases to consumers, which means earnings could see bigger hits in the future.
“That is why we are wary on the equity side,” he said.
Among the products that Mr. O’Sullivan said he favours in the fixed-income space are higher-quality and shorter-term bonds. Still, he added, it is important for investors to find portfolio diversity outside bonds this year. For that, he said he views commodities as attractive, specifically metals such as copper, which could continue to benefit from China’s reopening.
Find the fear, and find the value
Ramona Persaud, a portfolio manager at Fidelity Investments, said she can still identify bargains in a pricey market by looking in less-sanguine places. Find the fear, and find the value, she said.
“When fear really rises, you can buy some very well-run businesses,” she said.
Take Taiwan’s semiconductor companies. Concern over global trade and tensions with China have weighed on the shares of chip makers based on the island. But those fears have led many investors to overlook the competitive advantages those companies hold over rivals, she said.
“That is a good setup,” said Ms. Persaud, who considers herself a conservative value investor and manages more than $20 billion across several U.S. and Canadian funds.
The S&P 500 is trading above fair value, she said, which means “there just isn’t widespread opportunity,” and investors might be underestimating some of the risks that lie in waiting.
“That tells me the market is optimistic,” said Ms. Persaud. “That would be OK if the risks were not exogenous.”
Those challenges, whether rising interest rates and Fed policy or Russia’s war in Ukraine and concern over energy-security concerns in Europe, are complicated, and in many cases, interrelated.
It isn’t all bad news, she said. China ended its zero-Covid restrictions. A milder winter in Europe has blunted the effects of the war in Ukraine on energy prices and helped the continent sidestep recession, and inflation is slowing.
“These are reasons the market is so happy,” she said.
What goes up, must come down. But not necessarily this fast. Canadian marijuana stocks that posted staggering gains on Wednesday fell just as fast Thursday, while U.S. multistate operators, or MSOs, were dragged down, but fared a bit better. Tilray stock (ticker: TLRY) fell 49.7% Thursday, erasing all its gains from the prior trading day. Aphria stock (APHA) closed down …