Perspectives
Hedging
November, 2022
For UK investors the performance of the Cable or Dollar Index has a significant influence over the risk and return characteristics of their portfolios which are typically priced in British Pounds. “Cable “a slang term dating back to the mid-19th Century when telegraph cables were laid between London and New York to enable faster communication, […]
It’s all about remembering what you need
November, 2022
When markets are going up, we feel annoyed if we have not participated in that rise. When they fall, we feel annoyed that we invested at all! This phenomenon is known as the psychology of missing out – as humans, we fear being left behind. This occurs in everyday life as well as when we […]
Beauty is in the eye of the beholder
November, 2022
We’ve mentioned before that at Tacit Investment Management we don’t have a quantitative edge. This doesn’t mean we don’t use quantitative data in making decisions. An understanding of quantitative data in the context of history can provide very useful insights. Most people compare the market today to the Dot-com bubble in 1999/2000 because they both […]
LDI & the Gilts Market
October, 2022
Clients that have followed the team’s thinking over many decades are familiar with some of the key principles that drive our investment philosophy. Often these principles are drawn from famous thinkers and practitioners in the field of finance and economics. A good example is the exhortation to “avoid the permanent impairment of capital,” that is […]
Dividend Aristocrats
October, 2022
Dividends are a crucial component of any long-term equity strategy and, simply put, might be the only tangible return earned by the permanent owner of an equity asset. They significantly contribute to long term equity market performance (between 30% and 50% of total returns depending on the market in question) and excepting corporate action, drive […]
KISSing the gilt curve
October, 2022
Regular readers will know that at Tacit we believe it is generally good to KISS, that it to “Keep It Simple Stupid”. There is a place for more complex investment instruments and strategies which make use of derivatives, harvest arbitrage differences, or amplify returns by using borrowing (known as leverage), but the first essential rule […]
What should you worry about as an investor?
October, 2022
A member of the team came across a list of annual financial and geopolitical events going back over a century which many investors may deem life changing and ‘unprecedented’. In our view, the term ‘unprecedented’ is used more frequently than it should and implies that events could not be anticipated. This just is not the […]
Market Reaction to the UK’s Fiscal Event
September, 2022
UK financial markets have reacted extremely badly to the “fiscal event” launched by Kwasi Kwarteng, the new Chancellor of the Exchequer. Every British financial asset has slumped: equities, gilts, and the external value of the pound. House prices look vulnerable to a sharp rise in mortgage rates as the Bank of England debates how to […]
Trickle down or bottom-up economics? It’s the wrong question
September, 2022
Our new Prime Minister and Chancellor want to change things for the better. Their economic policy is naturally a little un-fleshed, but the skeleton of the programme is visible; it is a return to a Thatcherite or Reaganite past informed by Hayek, Friedman, Keith Joseph and Enoch Powell, the latter two described as “very great […]
The world has changed, most people just don’t see it
September, 2022
Since the financial crisis of 2008, the attention of too many investors in the West has become focussed on the expectation of persistently low and lower interest rates, and ever higher valuations for equities in companies imbued with a lot of future hope value. All other things being equal, technically, a lower interest rate (the […]