Perspectives

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Navigating a Crisis

April, 2020

We have often written about the stabiliser and growth approach used in our strategies. The growth assets, as the name implies, generate the majority of the growth in investment returns. This includes shares in companies, high yield bonds and emerging market debt. The stabiliser part of the portfolio is less exciting. Stabilisers exist for one […]

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Manager Updates

March, 2020

Although we spend a lot of time explaining the economic picture and risks associated with equity valuations, an integral and important part of the Tacit Investment Process is understanding the funds we include within our strategies, and, most especially, understanding how each of the managers of these funds behaves at times of market stress. The […]

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The Eye of the Storm

March, 2020

You may have noticed that we have positioned portfolios very defensively at present with high allocations to Stabiliser assets and cash. This is to preserve values in the short term as we are experiencing a sudden, material shock to global economic demand which was not expected and appears to now be longer-lasting than any of […]

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Budget Response to Corona

March, 2020

It seems John Maynard Keynes is making a comeback in the unlikely form of Rishi Sunak, the new Chancellor of the Exchequer.  Mr Sunak‚Äôs budget is a sharp reversal of the approach taken by recent Chancellors, most obviously, George Osborne, but it is really a return to the economic orthodoxy that prevailed before the word […]

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Coronavirus Downgrades to Growth

March, 2020

Towards the end of 2019, it was clear that the economic slowdown that had commenced in the 1st  quarter of 2018 and which troughed in the 1st quarter of 2019 was beginning to stabilise. Average earnings were trending higher, employment improving, albeit with a heavy emphasis on low paid work, and the trade war that […]

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What it All Means

February, 2020

The recent outbreak of the Coronavirus in Northern Italy has confirmed what most experienced doctors and clinicians have been predicting: that this outbreak, although potentially less deadly than other strands, is more difficult to detect and therefore has the ability to spread more widely across the globe. The term pandemic has been readily used across […]

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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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