Perspectives

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The Role of Stabilisers

August, 2019

The venture capitalist Paul Graham said that investors should treat optimism similarly to how one would treat the core of a nuclear reactor – as a source of power that is also very  dangerous. “You have to build a shield around it or it will fry you”. This is similar to how we view the […]

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Power Law

August, 2019

Over 300 years of Romanov rule ended in 10 days during the Russian revolution. Very few cars are majority contributors to overall air pollution. A few words in the English language like “the” and “is” occur with disproportionate frequency compared to every other word. A minority of the population owns the majority of the wealth. […]

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Changing Fiscal Policy – Austerity to Spendthrift

August, 2019

In the long slow recovery from the great financial crisis, the conduct of monetary policy has all but eclipsed fiscal policy in the major economies. By fiscal policy, we mean changes by government to the general level of taxation and the government’s own spending. Prior to 2008, almost all postwar recessions had been rectified, at […]

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Risk Adjusted Returns

July, 2019

At Tacit, we firmly believe that equities are a good thing in the long run. Over time, rising equity markets are good for confidence, good for an individual’s wealth and ultimately good for the economy as people spend more when they feel wealthier. It is important however to remember that downturns in equity markets can […]

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EI Group Bought by Stonegate

July, 2019

One of the UK’s top leisure activities is still, “going down the pub.” The eating and drinking market according to the MCA UK Pub Market Report (2018) is worth £89 billion per year. Despite the well documented decline in public house numbers, it’s estimated that 15 pubs a week are closing, there are still some […]

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Forecasting

July, 2019

“If you spend more than 13 minutes analysing economic and market forecasts, you’ve wasted 10 minutes”. This is a quote from Peter Lynch, the Fund manager of Fidelity’s Magellan fund. During his tenure, the fund had an annualised return of 30% over a 13-year period. While this quote carries a hint of hyperbole, its message […]

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A Price for Everything

July, 2019

It is often written that “uncertainty creates opportunity”. While this sounds trite, it is nevertheless true. Uncertainty can create opportunity through low prices. All investors know that Brexit has effected the UK equity market negatively; this is not however a one way street. The chart above shows that there has been a steady increase in […]

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Second Order Thinking

June, 2019

In the long term, most fund managers get average results because they are first order thinkers. A first order thinker will say something like “Apple’s earnings growth will decline because of a slowdown in phone upgrades and stiffer competition from other smart phone brands, therefore sell the stock”. A second order thinker will say “Apple […]

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Investing for the Long Term

June, 2019

Following a week where investors have begun to question long term investing and star fund managers, we feel it is important to provide some context. In simplistic terms there are two ways to invest: either to be a longer term investor in assets or to be a trader in short term market moves. Both approaches […]

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Defensive Stocks

June, 2019

A discussion about utilities act as weights on the eyelids and will put most people to sleep. This reputation is well deserved. Utilities are boring companies engaged in supplying a necessary service like electricity, water, internet and mobile services that customers will pay for come rain or shine. While some of the traditional utility companies […]

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