Tacit Thought

Tacit Thought Light Bulb Icon

Why do all roads lead to the US?

May, 2022

Recency bias is a cognitive bias that tends to place greater emphasis on more recent experiences and memories, even if they are not the most relevant or reliable. For investors this behavioural bias manifests itself all too often and can be challenging to avoid as more recent financial market events cloud judgement. It convinces us […]

Tacit Thought Light Bulb Icon

History rhymes

April, 2022

Russia’s incursion into Ukraine has raised a multiplicity of complex ethical, political, social, and economic issues which elicit different explanations and responses, depending on the perspective from which you begin. We in the UK are largely influenced by what might be termed a ‘developed world’ perspective, which might crudely be characterised as democratic, broadly liberal, […]

Tacit Thought Light Bulb Icon

What goes down must go up, right?

April, 2022

Clients of Tacit will recognise the term ‘moat’ in the context of the investments we hold in our strategies. Moat is a term that Warren Buffett uses to illustrate the competitive advantage of a company. Its definition in the dictionary is that it is “a deep, wide ditch surrounding a castle, fort, or town, typically […]

Tacit Thought Light Bulb Icon

The Impact of Deglobalisation?

April, 2022

When Henry Kissinger asked Zhou Enlai about the significance of the French Revolution, Enlai reputedly replied, “It’s too early to tell.” In 1972, the year of Richard Nixon’s meeting with Zhou the size of the Chinese economy was $113bn (IMF, PPP) and the country was a backwater. Today, similar estimates put the size of the […]

Tacit Thought Light Bulb Icon

US Economic Leadership: Not changing any time soon

March, 2022

The tragic events unfolding in the Ukraine highlight the geo-political risks that investors must factor into their planning and poses once again the question of where is it safe to invest. In moments of crisis, funds frequently flow to the US, and we see no reason why this time should be any different. The US […]

Tacit Thought Light Bulb Icon

Money illusion

March, 2022

Standard economics assumes that rational people base their decisions on real value only and take changes in price tags properly into account. For example, rational consumers are assumed to base their shopping decisions on “real” prices (e.g., how many hours do I have to work for a loaf of bread?) and would not change their […]

Tacit Thought Light Bulb Icon

Ukraine, Energy & Inflation

March, 2022

It is a truism that the Russian economy is dependent upon energy exports, principally oil, for its balance of payments. According to the International Energy Agency (IEA) Russia accounts for 5 million barrels a day on world export markets some 12% of total demand. That export success is not matched by an equal desire for […]

Tacit Thought Light Bulb Icon

Sanctions in a digital world

March, 2022

For the past two weeks we have read daily reports of new financial sanctions that have been imposed on the Russian state, Russian companies and Russian individuals by countries in the West. It may surprise you to know that more than half of Russia’s central bank reserves are actually not covered by any sanctions as […]

Tacit Thought Light Bulb Icon

The confusing of risk and uncertainty

February, 2022

When investing, it is important to differentiate between risks and uncertainties. Uncertainties, in the words of the former US Secretary of State Donald Rumsfeld, are unknown unknowns. Risks, on the other hand, are known unknowns. For example, if you were planning to collect a friend or family member from the airport, the probability that their […]

Tacit Thought Light Bulb Icon

Not all that glistens is gold

February, 2022

Many investors have become obsessed with interest rate rises in the short term and on how this affects the valuation of a company. We have written many times over the past decade that until interest rates provide, or are forecast to provide, a positive real return on a multi-year basis, not a lot has really […]