Perspectives
Unintended consequences
August, 2021
Gordon Pepper, a founder of Greenwell Montagu’s gilt-edged business in the 1970s had the unusual background of a Cambridge economics degree, actuarial training and, as a young graduate, a job on the floor of the old stock exchange as a dealer. He was the widely respected author of Greenwell’s Monetary Bulletin, required reading in those […]
Characteristics of Chinese Technology Companies
August, 2021
China’s economy is often described internally as “socialism with Chinese characteristics”. Its stock market, largely driven by the large technology companies, can also be described using such idiosyncratic phrasing. The large Chinese tech companies are not quite like the tech companies in America, Europe or anywhere else. They come with their own unique characteristics. The […]
Characteristics of British Technology Companies
August, 2021
Britain has a long history of innovation. The Lunar society in Birmingham had members such as Joseph Priestly, Erasmus Darwin and James Watt, who were some of the catalysts behind the industrial revolution in the 18th century. In the 20th century, Frank Whittle, the co-inventor of the turbo jet engine, ushered in the age of […]
COVID and The Housing Market
August, 2021
Record low interest rates, stamp duty holidays and a government guarantee for mortgages are some of the reasons behind the recent rise in UK property values. An emphasis on subsidising demand instead of increasing supply has naturally led to a substantial rise in residential property prices. This is not unique to the UK however as […]
Consider You May Be Wrong
July, 2021
To manage the funds that are entrusted to us we have to build a model of how we think the world economy is working. The inputs into that model are multi-variate; some are quantitative, and some are qualitative. Quantitative inputs include the level of interest rates, cost of capital, expected inflation rates, implied discount rates, […]
Return Free Risk
July, 2021
Robert Heinlein, one of the most prolific sci-fi authors of all time, was a sceptic of specialisation. To quote: “A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, […]
The Advantages of Backwardness and the Opportunities in Change
July, 2021
In Saffron Walden, where one of our colleagues lives, there is a broken and battered old building next to the common emblazoned with the word “GASWORKS” and underneath dated 1836. Victorian England was lit by gas. Gas mantles were used in domestic houses until the late 1940s and early 1950s when the post-war slum clearances […]
In Search of Stability
July, 2021
Roman centurions during the age of Augustus earned a stipend of about 3,750 denarii, roughly 38 ounces of gold. Today, in the age of Biden, the average US Army captain earns a salary of about $70,000, or about 39 ounces of gold at current prices. Over two millennia, across a multitude of wars, plagues, famines, revolutions and […]
All Roads Lead to Rome
July, 2021
You may have noticed that a small footballing victory this week sends our domestic “English” team to Rome for their quarter-final against Ukraine. This prompted us to think about Italy in Europe and to consider one of the few rational reasons for Britain departing the European Union: chronic economic stagnation. The IMF recently published their […]
Growth versus Value
June, 2021
There is no right or wrong when considering the valuation of a company today with its potential returns in the future. Sometimes, expensive companies do well and at other times those trading cheaply perform well. The factors that influence whether a company trading on a price-earnings (P/E) ratio of 22 today performs better than a […]