Perspectives
COVID and The Housing Market
August, 2021
Record low interest rates, stamp duty holidays and a government guarantee for mortgages are some of the reasons behind the recent rise in UK property values. An emphasis on subsidising demand instead of increasing supply has naturally led to a substantial rise in residential property prices. This is not unique to the UK however as […]
Consider You May Be Wrong
July, 2021
To manage the funds that are entrusted to us we have to build a model of how we think the world economy is working. The inputs into that model are multi-variate; some are quantitative, and some are qualitative. Quantitative inputs include the level of interest rates, cost of capital, expected inflation rates, implied discount rates, […]
Return Free Risk
July, 2021
Robert Heinlein, one of the most prolific sci-fi authors of all time, was a sceptic of specialisation. To quote: “A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, […]
The Advantages of Backwardness and the Opportunities in Change
July, 2021
In Saffron Walden, where one of our colleagues lives, there is a broken and battered old building next to the common emblazoned with the word “GASWORKS” and underneath dated 1836. Victorian England was lit by gas. Gas mantles were used in domestic houses until the late 1940s and early 1950s when the post-war slum clearances […]
In Search of Stability
July, 2021
Roman centurions during the age of Augustus earned a stipend of about 3,750 denarii, roughly 38 ounces of gold. Today, in the age of Biden, the average US Army captain earns a salary of about $70,000, or about 39 ounces of gold at current prices. Over two millennia, across a multitude of wars, plagues, famines, revolutions and […]
All Roads Lead to Rome
July, 2021
You may have noticed that a small footballing victory this week sends our domestic “English” team to Rome for their quarter-final against Ukraine. This prompted us to think about Italy in Europe and to consider one of the few rational reasons for Britain departing the European Union: chronic economic stagnation. The IMF recently published their […]
Growth versus Value
June, 2021
There is no right or wrong when considering the valuation of a company today with its potential returns in the future. Sometimes, expensive companies do well and at other times those trading cheaply perform well. The factors that influence whether a company trading on a price-earnings (P/E) ratio of 22 today performs better than a […]
Disruption
June, 2021
“Past performance is not a guarantee of future results” is pasted across multitudes of financial promotions that we see every day. While this statement is correct, the following question naturally arises: If the past is not a guarantee of what the future will look like, is the future fundamentally unknowable? While past performance is […]
Boom coming?
June, 2021
Recent events in financial markets have been coloured by rising fears of inflation. Anybody under the age of 50 has not experienced inflation in the way that the 1970s distorted pricing, spending decisions and investment. In fact, in recent years most people have benefited from a different type of inflation, house price inflation. From an […]
Squaring the Cycle
June, 2021
The philosopher Friedrich Hegel observed that human society makes progress by moving from one extreme to another as it seeks to overcompensate for previous extremes. This constant swing between extremes is just as natural in the investment world, albeit occurring on much shorter timescales. The primary driver for these swings in investing is, as ever, […]