Tacit Thought

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Bursting the Bubble

February, 2020

Investing in the public markets, you get frequent appraisals of your holdings. The daily fluctuations in prices though have nothing insightful to tell you about risk, they are the value a buyer puts on a particular investment at that moment in time. Business schools and much of the finance industry measure the fluctuations in prices […]

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The Most Important Thing

February, 2020

A good idea taken to its logical extreme is often how bad ideas are conceived. There are many examples of this in fields as diverse as biology and finance. For investors, this is very important because one of the biggest threats to generating good returns is engaging in irrational competition. Why did the Irish elk […]

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To ESG or not ESG, that is the question

February, 2020

Recently, there has been a lot of focus on sustainability and ESG investing, where the environmental and societal impacts of a company are factors that are considered when selecting investments. The argument is that climate change is in itself an investment risk so divesting away from unsustainable companies will improve risk adjusted returns. For long […]

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Nominal and Real Returns

February, 2020

Barclays has issued the Equity Gilt Study in one guise or another continuously since 1956, providing data and analysis on long-term asset returns in the UK dating back to 1899. This long data set provides a unique picture of how returns are affected by two simple factors over time: Inflation Reinvestment of cashflows The illusion […]

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A Formula for Investing

January, 2020

Most new investors want to know a quick, sure-fire formula for making money in the markets. Such a formula, of course, cannot exist. If it did, any business school purporting to teach such a formula would charge infinitely high tuition fees. Also, if enough people use the formula, it becomes worthless. Why? Because if everyone […]

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Watching the News

January, 2020

There is a somewhat irrational urge by investors to always stay informed with the latest news and have well-formed opinions about their implications for businesses and the broader economy. The truth is, no one really knows how the news cycle will change; transforming what was once supposedly relevant news into obsolete opinions destined to be […]

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A Decade in Review

January, 2020

The seemingly arbitrary passage of roughly 3650 days is celebrated as a decade, which is the amount of time it takes our planet to revolve around the sun 10 times. Businesses and economic cycles do not however take note of such precisely choreographed celestial marathons. The last 10 years have shown that trying to make […]

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Things rarely turn out as you expect

December, 2019

At the turn of the year, most of the investment industry and financial press play out the role of Sisyphus from Greek mythology, forced to repeatedly roll a boulder up a hill only to have it roll back down once it reaches the top. This metaphor symbolises the fruitlessness and inevitability of forecasts. Our strongly […]

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Elections

December, 2019

At Tacit, we have intentionally shied away from opinions on political events but we have been clear that the outcomes of these events are less predictable now than in the past, as social media and the now engrained effects of the financial crisis of a decade ago on economic disparity within countries have become more […]

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How Cheap is Cheap?

December, 2019

Many of you will be aware of emerging markets. These are countries that, in aggregate, have a lower GDP per capita, have less liquid markets, higher inflation rates and less stable currencies than developed markets. Some countries currently classed as emerging markets are China, India and Brazil. There is an entire class of countries that […]