personal investment blog

Trade Agreements – the New Protectionism

Trade Agreements – the New Protectionism

2 May 2016

THE “UNREPEATABLE” MISTAKES OF THE 1930s According to the IMF (and pretty much everyone else, I believe) the Great Depression of the 1930s was made worse by protectionism. After the financial crisis that blew up in 2008, leaders of the Group of 20 (G-20) economies pledged to “refrain from raising new barriers to investment or to trade in goods and services,...

BREXIT special. Does politics affect asset prices?

BREXIT special. Does politics affect asset prices?

15 Mar 2016

A STUPID ARGUMENT THAT YOU WILL CERTAINLY HEAR ENDLESSLY One of the most commonly and confidently asserted falsehoods is that markets hate uncertainty. Without uncertainty there would be nothing for markets to price. The pricing of assets is about probability. All questions of probability involve uncertainty. If you ever meet someone who believes in certainty...

OSTRICH POST II – DADT

OSTRICH POST II – DADT

25 Jan 2016

Don’t Ask, Don’t Tell (DADT) was a (now repealed) US official policy that insisted that gays serving in the military must take part in a cover-up. On the grounds that they kept their sexual preferences a secret they were excused from being openly bullied, discriminated against and dismissed. Something that everyone knew to be untrue (the idea that the US...

Melting capex

Melting capex

24 Dec 2015

This seems to be a time in which people have a touching faith in the idea that progress can be achieved through international negotiations. Certainly, the mutual back-slapping following the Conference Of Parties (COP21) in Paris implied that a new era of cooperation has arrived. COP21 had 25,000 official delegates and an estimated further 25,000 fellow...

Housing demand and demographics

Housing demand and demographics

5 Nov 2015

If you arrived today from Mars and the first human you met tried to explain the housing market, you might hear that average prices are >10x average earnings for the first time and that interest rates are at a 3000 year low. If he then told you to invest all your savings in a property you would probably zap him into a little pile of ashes. Because Martians...

Monday 19th October

Monday 19th October

14 Oct 2015

Next Monday is an evocative date for those of us who worked in the City of London in 1987. The nineteenth of October became known as Black Monday (not the first or the last) as global stock markets went into meltdown. The Dow Jones Industrial Average fell by 22.6% in that single day. At one point during the trading day it was reported that the Chairman of the...

“Clients are very nervous”

“Clients are very nervous”

28 Aug 2015

Like many people, I hoped and almost believed that the financial services industry would reform itself after the global disaster for which it was largely responsible. Sadly, there is plenty of evidence that the “leaders” of the financial community are merely waiting to resume their old behaviour. No one appears to be trying very hard to stop them and, if one...

On Scepticism – can we have our word back?

On Scepticism – can we have our word back?

9 Jun 2015

Scepticism is essential to successful investment. At its simplest, it implies recognising the possibility that anything the market prices as certain or very likely, might turn out to be false. This practical application of scepticism should feature in all investment decisions. Given the priceless value of scepticism, it seems wrong and somewhat suspicious that...

Our fictitious “housing crisis”

Our fictitious “housing crisis”

6 May 2015

IT’S NOT ABOUT HOMES, IT’S ABOUT HOUSE PRICES Politicians, journalists and sundry do-gooders seem, against the odds, to have discovered one fact on which they all agree. It seems that Britain has a housing shortage and, to paraphrase the late Vivian Nicholson, we must build, build, build. Whenever an opinion, no matter how compellingly simple, is presented as a...

Sex and money – we need to talk

Sex and money – we need to talk

10 Mar 2015

Calm down now. This post does not address the alleged aphrodisiac qualities of wealth or any other aspect of paying for sex. It is about taboo subjects. A combination of embarrassment and distaste tends to prevent the discussion of topics that should properly be addressed. Hence our nation’s ludicrous history of sexual secrecy with its toxic residue of...

The ECB, QE and the waiting game

The ECB, QE and the waiting game

12 Feb 2015

Quantitative easing is a process by which a central bank buys relatively safe assets (mostly government bonds) and thereby puts cash into the hands of the newly-ex owners of those assets. In the early years of the financial crisis, this was effectively a life-support system for financial institutions which, post-Lehman Brothers, looked like they might fall...

OIL…….Something Happened

OIL…….Something Happened

7 Jan 2015

The recent sharp fall in the price of crude oil is one of those rare financial events whose importance is appropriately reflected in press headlines.  Oil has a strong claim to be the world’s most important commodity and also the most political. OPEC was founded in 1960 by the charming quintet of Iraq, Iran, Saudi Arabia, Kuwait and Venezuela. According to its...

The paradoxical results of education for the masses

The paradoxical results of education for the masses

2 Dec 2014

The Churchill wartime government was kicked out by the electorate less than three months after the German surrender in May 1945. Labour won a huge majority and set about a radical socialist programme of nationalisation of key industries and the creation of the NHS and the welfare state. That story is quite well known. What will surprise many people now is that...

Turning a good idea into an investment

Turning a good idea into an investment

29 Oct 2014

This is the transcript of a speech I made this week at the smartfuturelondon conference How to turn a good idea into an investment What makes a good idea?  If everyone agrees that change is inevitable and ‘it’s only a matter of time’, it always seems to take a very long time. Having heard yesterday’s presentation on smart energy – hands up if anyone thinks...

The dead constituency

The dead constituency

24 Sep 2014

There is a widespread view in what passes for middle-England that people have a right to leave their wealth to their descendants. It seems odd that, in a country where demonising privilege has persisted as a mainstream political sport, we mostly seem to be more than comfortable with the idea that success or fortune should pass from one generation to another....

Moral money

Moral money

21 Aug 2014

What do Iran, Syria, Zimbabwe and North Korea have in common? There may be several answers but one is that, along with 145 other nations, they are recipients of UK Official Development Assistance (ODA). In 2012, total UK aid was £8.766 billion or 0.56% of gross national income. According to the press, this may have risen to 0.70% in 2013, which is the target...

The eurozone is the frozenzone

The eurozone is the frozenzone

19 Jun 2014

The yields of bonds issued by government are broadly influenced by three factors: the performance of the underlying economy; the outlook for the currency in which the bonds are denominated; and the probability of default. Eurozone government bonds have demonstrated all three factors at work since the financial crisis hit in 2008. The story can be traced by the...

Patriotism, protectionism and AstraZeneca

Patriotism, protectionism and AstraZeneca

15 May 2014

Boswell attributed to Dr Johnson these well-known words: “Patriotism is the last refuge of a scoundrel.” I suppose there is some merit in this view if you accept that the great tyrants of history have tended to claim to be patriots (though “scoundrel” seems a mild word to apply to the men responsible for the Holocaust, Collectivisation and The Great...

Jittery January

Jittery January

6 Feb 2014

“The bond markets are suggesting that we are looking at a fairly gentle, low inflation recovery.” The dangerously alluring feeling of comfort that I wrote about in my Q4 report did not last long. Major stock markets have fallen this year: FTSE -4%, Dow Jones -6%, Nikkei -13%. Many financial commentators are saying that this is the result of weakness...

Bring on the girls

Bring on the girls

5 Nov 2013

A few weeks ago, I listened to Carolyn McCall, CEO of Easyjet, choosing her Desert Island Discs on Radio 4. After her first 18 months in the job, the shares have taken off, soared and flown since the start of last year (+187% as I write). I found myself thinking that she had timed that career move perfectly – there has been a tremendous cyclical recovery in...