Perspectives
The Impact of Deglobalisation?
April, 2022
When Henry Kissinger asked Zhou Enlai about the significance of the French Revolution, Enlai reputedly replied, “It’s too early to tell.” In 1972, the year of Richard Nixon’s meeting with Zhou the size of the Chinese economy was $113bn (IMF, PPP) and the country was a backwater. Today, similar estimates put the size of the […]
US Economic Leadership: Not changing any time soon
March, 2022
The tragic events unfolding in the Ukraine highlight the geo-political risks that investors must factor into their planning and poses once again the question of where is it safe to invest. In moments of crisis, funds frequently flow to the US, and we see no reason why this time should be any different. The US […]
Money illusion
March, 2022
Standard economics assumes that rational people base their decisions on real value only and take changes in price tags properly into account. For example, rational consumers are assumed to base their shopping decisions on “real” prices (e.g., how many hours do I have to work for a loaf of bread?) and would not change their […]
Ukraine, Energy & Inflation
March, 2022
It is a truism that the Russian economy is dependent upon energy exports, principally oil, for its balance of payments. According to the International Energy Agency (IEA) Russia accounts for 5 million barrels a day on world export markets some 12% of total demand. That export success is not matched by an equal desire for […]
Sanctions in a digital world
March, 2022
For the past two weeks we have read daily reports of new financial sanctions that have been imposed on the Russian state, Russian companies and Russian individuals by countries in the West. It may surprise you to know that more than half of Russia’s central bank reserves are actually not covered by any sanctions as […]
The confusing of risk and uncertainty
February, 2022
When investing, it is important to differentiate between risks and uncertainties. Uncertainties, in the words of the former US Secretary of State Donald Rumsfeld, are unknown unknowns. Risks, on the other hand, are known unknowns. For example, if you were planning to collect a friend or family member from the airport, the probability that their […]
Not all that glistens is gold
February, 2022
Many investors have become obsessed with interest rate rises in the short term and on how this affects the valuation of a company. We have written many times over the past decade that until interest rates provide, or are forecast to provide, a positive real return on a multi-year basis, not a lot has really […]
Drink Deep or Taste Not
February, 2022
“A little learning is a dangerous thing, Drink deep, or taste not the Pierian spring.” Alexander Pope, “Essay on Criticism” (1711) Augustan poetry may not be to your taste, but Pope’s rhyming couplet contains a truth that is often forgotten by investors. It is important to know and understand what you are invested in and […]
Context is vital when investing for the longer term
January, 2022
As January draws to a close one point has confused many investors: why is my portfolio value down whilst the Footsie 100 has risen? This observation is a valid one over this short period and we feel it needs explanation and putting into the context of history. Firstly, the geographic breakdown of our strategies is […]
Stockmarket Volatility
January, 2022
Investment management is a discipline founded on mathematics, however there are so few mathematical certainties within it. Rather, investors are usually dealing with probabilities; things that might happen based on our best estimates of a range of contingent variables. There is however one mathematical relationship which is fundamental; that between “price” and “yield.” Yields move […]