Perspectives
Stay Focused on your Objective
October, 2019
With the focus very much on short term issues in the UK and US, we believe investors are missing key longer-term implications being highlighted in government bond markets. Government bond yields around the world have continued to fall even whilst economic growth has rebounded over the past decade. This puzzles most investors as the standard […]
Bayes’ Rule
September, 2019
Thomas Bayes was an English Presbyterian minister and statistician known for formulating Bayes’ rule. Its practical application has been very useful since it was published in 1763. It was partly responsible for cracking the enigma code during the Second World War and tracking Russian submarines during the Cold War. In the modern world, its applications […]
Forced Sellers
September, 2019
One of our analysts recently tried to buy a house plant for the office. These however don’t come cheap if bought new from a garden centre or plant shop. Being a value investor on the hunt for a quality bargain, searching for forced sellers comes naturally. People moving houses or offices often sell their plants […]
It’s A Looking Glass World
September, 2019
The period in which we live is drenched in contradictions; political, economic and financial. The poor old White Queen has been dragged from the pages of Through the Looking Glass to declaim on believing “six impossible things before breakfast” more times than we can count. Most recently on the Today programme this week. The financial […]
Beware the Noise
September, 2019
Over the last few days, the news has been largely negative – from the rising risks of a no-deal Brexit to Boris Johnson’s suspension of parliament and a falling sterling. We have highlighted many times before that the noise created by political events must be blocked out when making longer term investment decisions, no matter […]
Rational Optimism
August, 2019
Blaise Pascal, the French mathematician and philosopher aptly diagnosed the human condition over 300 years ago. “All of man’s miseries derive from not being able to sit in a quiet room alone”. This is because we hate being bored and can’t stop ourselves from worrying. Boredom and worry are not the ally of the investor […]
How Might A No-deal Be Positive?
August, 2019
G K Chesterton once noted that to defeat an argument you needed to be able to state your opposition’s case, “better than they could.” With the likelihood of the UK falling out of the EU without a deal rising, we need to consider whether such an outturn could be beneficial to investors in the UK […]
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 […]
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. […]
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 […]