Macro-Fundamentals-Positioning Investment Process
Combine the environment, business reality, and market behavior before investing
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 98%
The process evaluates an investment through three connected pillars. Macro analysis establishes the operating environment by examining politics, policy, economic data, government behavior, and the business cycle. Fundamental analysis then identifies industries, technologies, consumer shifts, supply-chain changes, and companies capable of benefiting within that environment. Finally, positioning, sentiment, flows, and technical behavior guide implementation, particularly entry and exit timing. Valuation sits beside these pillars as useful context rather than an overriding decision rule. A high multiple may reflect a structurally superior business, while a low multiple may signal permanent impairment. The output is therefore not simply a list of cheap assets, but a portfolio whose exposures, instruments, sizing, and timing reflect both economic reality and current market behavior.
Origin
Kate Moore described this process on Masters in Business after applying macro, equity, thematic, and multi-asset perspectives across Morgan Stanley, Moore Capital, Merrill Lynch, JPMorgan, BlackRock, and Citi Wealth.
Core principles
- 01Macro conditions shape every investment opportunity.
- 02Fundamentals identify businesses and themes with genuine strength.
- 03Positioning and sentiment determine better entry and exit points.
- 04Valuation provides context but should not dictate the decision.
- 05Long-term investors still benefit from thoughtful trade timing.
How to run it
- 1
Map the macro environment
Assess politics, policy, government behavior, economic data, and the business cycle. Determine which forces will support or constrain industries and asset classes.
Pro tip Include incentives and likely policy reactions rather than treating economic releases in isolation.
Watch out Do not dismiss macro conditions merely because a company appears fundamentally strong.
- 2
Find fundamental opportunities
Identify where growth, technological change, consumer behavior, or supply-chain shifts create durable opportunities. Examine which companies are executing well within those areas.
Pro tip Translate broad themes into specific business drivers and beneficiaries.
Watch out A compelling narrative without improving business fundamentals is insufficient.
- 3
Read positioning and sentiment
Study fund flows, investor positioning, new instruments, price reactions, and technical conditions. Use these signals to understand crowding and risk appetite.
Pro tip Pay particular attention to how prices react to apparently good or bad news.
Watch out Do not rely on one sentiment survey or one noisy daily indicator.
- 4
Plan implementation
Select the asset, instrument, position size, and entry point that best express the thesis. Define conditions for adding, reducing, or exiting.
Pro tip Even a long-term thesis can benefit from disciplined entry and exit timing.
Watch out Correct analysis can still produce poor results when the expression or sizing is wrong.
- 5
Contextualize valuation
Compare valuation with business quality, market composition, balance-sheet strength, cash generation, and the current regime. Treat it as supporting evidence rather than a mechanical buy or sell signal.
Pro tip Ask whether the apparent premium or discount is economically deserved.
Watch out Historical averages may be misleading when businesses and market structures have changed.
In the wild
An investor begins with rising geopolitical and digital-operational risks, identifies security software as an increasingly essential corporate expense, and selects companies with strong capabilities and spending momentum. Flow data, crowding, and reactions to earnings determine when to rotate among names or resize the position. Valuation informs the entry but does not automatically exclude a superior company trading at a premium.
→ The investor maintains exposure to a durable theme while adapting implementation as catalysts and market positioning evolve.
A screen identifies an apparently cheap company, but fundamental analysis reveals structural impairment and weak cash generation. Macro conditions offer no clear catalyst, while positioning shows little demand for the asset. Instead of buying solely because the multiple is below its historical average, the investor rejects the trade.
→ The process avoids mistaking a deserved discount for an undervalued opportunity.
Common mistakes
Ignoring macro conditions
A strong company can still suffer when policy, the business cycle, or asset-class demand turns against it. Company quality does not eliminate environmental risk.
Using valuation as an automatic signal
Cheap assets may be structurally impaired, while premium businesses can remain highly valued and continue compounding for years.
Neglecting implementation
Getting the theme right is not enough when the asset, timing, sizing, or instrument is wrong.
Is it for you?
Best for
It is best for active investors allocating across equities, sectors, themes, or multiple asset classes.
Not ideal for
It is not ideal for passive investors who deliberately avoid tactical decisions and security selection.
From the transcript
“I think macro is critical and a good starting point.”
“But the third stage, and it's really important to me. I mean it's grown in importance over the course of my career is the positioning,…”
“Valuation is a nice to know, but it is not a driving force of my investment process.”
From the episode
Citi Wealth Chief Investment Officer Kate Moore on Macro Investing
Kate Moore