The Lawton Bond Model

The Lawton Bond Model is an investment analysis and decision support tool invented by William Lawton, Chairman and Chief Investment officer of Seagate Global Advisors, LLC.

Thinking Behind the Model
The investment thinking behind the model is unusual as it combines both quantitative and qualitative techniques. Most investment models adhere to only one philosophical camp. Since purely quantitative models are driven by statistically fitted historical relationships, they tend to miss regime changes or at least lag in recognizing them. This point was outlined in "Quantitative Investing as a Liberal Art"
written by Dan diBartolomeo (reference below). Conversely, qualitative forecasting processes lack the rigor, structure, and philosophical continuity of quantitative models. The Lawton Bond Model attempts to avoid both pitfalls by modeling the fixed income markets dynamically and combining qualitative and quantitative factors comprehensively into a composite forecast.
Presented at the Milken Conference
The Lawton Bond Model was presented at a panel on Deciphering Asian Debt Markets on April 25, 2006 in Los Angeles.
Notable History of the Lawton Bond Model
The Lawton Bond Model was adopted as a research tool in 1993 by the People's Bank of China, and used as the basis for training bank investment staff at that time. In 1993, Mr. CHEN Yuan was the Vice Governor of the People's Bank of China. He was looking for a theoretical methodology to help manage the foreign exchange reserves that were increasing. He selected the Lawton Bond Model, and hired William Lawton to implement the Model at PBOC in 1993.

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