Perspectives
The Value of Growth
May, 2020
A lot of investors are familiar with Benjamin Graham – the father of security analysis and Warren Buffett’s mentor and first employer. Benjamin Graham popularised a style of investing called value investing. Its basic premise is that if you buy an asset at a discount to a conservative estimate of its value, you are likely […]
The Unholy Trinity
May, 2020
A fire requires three ingredients to be self-sustaining: fuel, a source of oxidation (oxygen in the air) and a source of ignition. This is known as the fire triangle. A fire can be prevented by removing any of these ingredients. This principle of elimination or avoidance of harm is used by fire fighters when fighting […]
The Cure?
May, 2020
Recently, there has been conflicting news of a potential cure for Covid-19 doing the rounds in the press. We thought it would be useful at this point to separate the wheat from the chaff and see what all of this really means. There have been three substantive clinical trials of the drug called Remdesivir manufactured […]
Estimating Fair Value
April, 2020
We are often reminded that financial markets can be volatile and erratic, and none more so at present than the oil market which briefly traded below zero last week. Imagine turning up at your local garage and being paid by the garage to fill up and drive on. Oil is by no means the only […]
Why the world could end but probably won’t
April, 2020
Stepping back from the frustrations of lockdowns, the growing toll of human tragedy, and the unhelpful daily twitter feed of President Trump, are investment markets actually behaving rationally? The current volatility in equity markets is driven by a change in future earnings estimates of the companies that make them up. As the price you pay […]
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 […]
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 […]
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 […]
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’s 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 […]
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 […]