Perspectives
Keeping Track of Brexit
October, 2020
Many years ago, C Northcote Parkinson examined company decision making in his still delightfully relevant book “Parkinson’s Law.” In the book he described how a company board could spend hours debating the merits of a proposal to give the employees a new coffee machine but could sign off on a new nuclear power plant in […]
Income Trap
October, 2020
Yields from government and corporate bonds continue their precipitous decent and major central banks implement negative interest rate policies, pushing interest on bank deposits further down. Even dividends, as this year has shown, can be fickle. The question of how one can safely generate an income stream from an investment portfolio without taking on excessive […]
Growth Always Comes with a Risk
September, 2020
We write a lot about risk. Risk means different things to different people: for example, to an architect the risk may be that a building is not pleasing to the eye once built, to a President the risk could be not getting re-elected, whilst for an investor risk could be missing out on market rises […]
The Death of Value?
September, 2020
Equity investors can be put into two distinct types: those that try to unearth future potential that others do not yet recognise (growth investors) and those that believe the market is undervaluing a company based on its intrinsic worth (value investors). Over the past decade many traditional value investors have struggled as the evolving economic […]
Perspective Changes with Distance
September, 2020
In our school days it was orthodox to treat the periods 1901-1914, 1914-1933 and 1933-1945 as discontinuous and distinct periods of history. Today historians regard the end of the Edwardian period in the UK to the fall of Germany in 1945 as a continuous period of great power competition with Versailles and Weimar the pivot […]
The Limits of Growth
September, 2020
Since the start of the year, one area of the market that has delivered phenomenal returns to investors, in spite of a global pandemic, poor economic growth and rising geopolitical tensions is compounder type businesses and companies claiming to be compounders. What exactly is a compounder business? They have three main characteristics. First, they tend […]
Finely Balanced
August, 2020
At Tacit we have spent the past ten years investing for ‘real returns’ and feel it is important to explain why this focus is so relevant at this juncture. Investors often look at returns without taking the impact of inflation into account: a concept known as money illusion. Simply put, a £10 note in your […]
What Changes, What Doesn’t
August, 2020
In this crisis, as in any other, it is good to spend some time thinking about what permanently changes in the economy and what does not. What is temporary and what is permanent? What is structural and what is cyclical? These are very important questions, but the answers are not always intuitive especially when one […]
What Matters, What Doesn’t
August, 2020
As of yesterday’s close, the largest public company in the world, Apple Inc, has a market capitalisation which is approximately equal to the total market capitalisation of the FTSE 100 – an aggregate of the largest public companies in the UK. What may come as an even bigger surprise is that the combined market capitalisation […]
The Price We Will All Eventually Pay
August, 2020
As investors, we have a habit of focussing on the most recent events and forgetting history. Much focus over the past few months has been on the containment of COVID-19 around the world and the emergency measures used by central banks and governments to limit the economic impact of lockdowns on individual countries. This time […]