Tacit Thought

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Beware the Herd

February, 2019

Academics have attempted to identify and predict the rational and irrational behaviour of group think in order to help predict future economic outcomes. Behavioural finance teaches us that herding is a natural human instinct driven by emotional reactions such as greed and fear. But it’s also something to be wary of: investors rushing to be […]

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Fee Adjusted Returns

February, 2019

Financial literature is crammed with different methods of calculating risk adjusted returns. However, very little attention is paid to an equally important metric which we call the fee adjusted return. At Tacit, we have often spoken about the importance of not trading frequently. This is because: 1. Frequent trading increases fees and reduces a client’s […]

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Simplicity Over Complexity

February, 2019

When Tacit was launched nearly a decade ago, our aim was simple: to provide clients with investment performance above UK RPI over rolling five year periods. Ultimately, the level of risk a client was willing to take in the short term would dictate how they fared over the longer against this objective. All clients, however […]

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A Different View on Emerging Markets

January, 2019

Emerging markets were relatively poor performers in 2018 with Turkey, Argentina and China suffering relatively large declines.     Successfully investing in emerging markets requires a strong filter because of the multitude of risks that plague these markets. Only a select few ideas are strong enough to make it through our investment filters at Tacit. These […]

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Plan B or no plan B? That is the question

January, 2019

There’s an old stock market saying, perhaps Shakespearean, that goes like this: ‘Everything has a price.” The proverb came into sharp focus this week during the Brexit brouhaha. The theory goes that we’re psychologically hardwired to place greater importance on current events than those of the past. Evolutionary biology apparently places a premium on survival […]

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The Ick Factor

January, 2019

No it’s not a Simon Cowell spin off show. But it is something that gets our vote. The investment community regularly borrows language from the outside world. Take the word catalyst for example. It’s normally used in the context of a chemical reaction. A catalyst, in investor speak however, is an event that has a […]

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2018 through the rear-view mirror

January, 2019

A turkey that has been cared for by a farmer for the entirety of its life has no reason to think that same person will kill it for food one day. The turkey looks at life through the rear-view mirror and its concept of the future is limited to what has happened in its recent […]

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Compounding Probabilities

December, 2018

A monkey randomly hitting computer keys for an infinite amount of time will in due course reproduce all the works of Charles Dickens. This monkey would also type everything written by Shakespeare, Hemingway, Achebe, the Harry Potter stories – you name it. This may sound absurd, but it’s mathematically correct and becomes obvious once we […]

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How we manage the Brexit blues

December, 2018

Whilst the UK political environment remains uncertain, it is important to stay focused on investing and not to speculate. At Tacit our ‘Growth/Stabiliser’ approach to portfolio construction is specifically designed for testing times like these. We thought long and hard about our ‘Thought’ this week. Client communication is especially important through these difficult periods. Access […]

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Market Cycles and Fraud

November, 2018

Jim Chanos is probably the best short seller in the world and has spent his career searching for frauds and companies with questionable business models including the likes of Enron, Tyco and more recently Valeant Pharmaceuticals. While we stay away from short selling (i.e. wagering that a company’s share price will fall) we listen intently […]