Tacit Thought

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Beware Money Illusion

October, 2021

We have written many times over the past decade about the difference between real and nominal values. Preserving the real value of an asset means that it must grow in line with inflation over time. Nominal values are what most people notice, however real values preserve your purchasing power in the future. In economics, money […]

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Corporate Debt & Creative Destruction

October, 2021

The Bank of England published its quarterly “Financial Stability Report” recently and it is no surprise to find that companies have resorted to borrowing to get them through the Covid pandemic. What is more interesting is the distribution of the increase in debt. It is overwhelmingly in the smaller company sector. The term “blue-chip” harks […]

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On inflation (and other matters)

October, 2021

It is hard in the UK to get away from the memories of the 1970s, when the government lost control of inflation, or the early 1990s when Black Wednesday occurred and the British government was forced to withdraw the Pound from the European Exchange Rate Mechanism (ERM), following a failed attempt to keep the pound […]

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ESG and Capital Allocation

October, 2021

Since 1900, population density has risen from 15 people per square kilometre, to 30 in 1960 and 60 in 2020. Compared to our Victorian ancestors, now each of us has only ¼ of the land available to support our needs. Biologically, we all need to eat, breathe, and excrete.  It is estimated that out of […]

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The End of QE: Should investors be concerned?

September, 2021

Every year the Chair of the US Federal Reserve gathers his or her fellow central bankers along with leading economists at Jackson Hole to discuss the state of the world’s finances. This year was no different, except of course, like meetings the world over, it was held virtually across the internet, saving the planet a […]

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Modern Tulips

September, 2021

The Dutch tulip mania in the 17th century saw the price of tulips rise precipitously before crashing back down to earth. Generally considered to be one of the first ever recorded asset bubbles in history, it remains unclear what precisely was the catalyst that precipitated the scramble for the flowers. Wealth certainly played a part. […]

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US Hegemony

September, 2021

We have written many times about the dominance of US technology companies and how countries such as the UK, Germany and France have been left behind by the technological revolution of the past 20 years. But we do not believe it is only over the past couple of decades that competitors have struggled to keep […]

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Why invest in an Investment Trust?

September, 2021

Tacit strategies have always had significant exposure to investment trusts due to their inherent benefits over other investment vehicles such as open-ended funds. This week we consider their inherent advantages to UK investors: A fixed pool of assets A ‘closed-end’ investment trust issues a fixed number of shares. This means the portfolio managers always know […]

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Unintended consequences

August, 2021

Gordon Pepper, a founder of Greenwell Montagu’s gilt-edged business in the 1970s had the unusual background of a Cambridge economics degree, actuarial training and, as a young graduate, a job on the floor of the old stock exchange as a dealer. He was the widely respected author of Greenwell’s Monetary Bulletin, required reading in those […]

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Characteristics of Chinese Technology Companies

August, 2021

China’s economy is often described internally as “socialism with Chinese characteristics”. Its stock market, largely driven by the large technology companies, can also be described using such idiosyncratic phrasing. The large Chinese tech companies are not quite like the tech companies in America, Europe or anywhere else. They come with their own unique characteristics. The […]