Perspectives
Stimulus: In defence of American leadership?
April, 2021
It was Adam Smith who remarked that, “there is a lot of ruin in a country.” Economies build a great deal of wealth over time and are, perhaps, more resilient than we sometimes think, particularly in the middle of a crisis such as the global pandemic. This is most evident in the US. At the […]
Hidden Growth
March, 2021
In 1892, the Holborn Viaduct power station in London became the first of its kind in the world. The location of the now defunct plant is coincidentally just a short walk from our offices. The plant supplied electricity to nearby streetlights and private residences. It used coal to drive a steam turbine which drove a […]
On Inflation
March, 2021
Much has been written about how prices of goods and services will respond to the sheer colossal scale of stimulus injected into the world economy by central banks and governments, all with the best intentions of staving off an economic collapse which would hurt livelihoods now and well into the future. We would suggest that […]
On Bitcoin
March, 2021
Most of the articles written on Bitcoin tend to be at the extremes. They are either written by sceptics who believe bitcoin is worth $0 (or possibly less than $0 because of its net negative environmental impact) or by the true believers who are confident its price will only continue to rise as more people […]
Much Ado About Nothing
March, 2021
The budget this week was a fine balancing act between nurturing an economic recovery and recognising that the costs of the pandemic will need to be recovered. The bottom line is that tax rates will rise but not yet, to give time for the recovery from Covid to become established. Taxes will be higher in […]
Bubble Trouble
February, 2021
The economist John Maynard Keynes is famous for saying that “markets can remain irrational longer than you can remain solvent”. Our version of this is that “markets can remain solvent longer than you can remain rational”. The fear of missing out is a powerful force. Today, the market “solvency” is fundamentally driven by low interest […]
On Bankruptcy
February, 2021
“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.” “What brought it on?” “Friends,” said Mike. “I had a lot of friends. False friends. Then I had creditors, too. Probably had more creditors than anybody in England.” Perhaps Mike in Hemingway’s story should have paid more attention to his […]
Why Invest?
February, 2021
Every now and then a question comes up that makes you take a step back and think. Sometimes the simple questions are the hardest to answer; for example, we were recently asked the question, “why invest?” The fundamental answer to that question is that aggregate savings fund aggregate investment through both public and private channels. […]
The Unintended Consequences of Leverage
February, 2021
The past week has seen retail investors become the centre of attention as they have driven the share prices of certain companies up by more than 100% in a day. This in itself is not newsworthy to us, however the fact that they created significant losses for certain hedge funds has reminded us of the […]
Lessons from the Future
January, 2021
In investing, there is always a metaphorical tug of war between the past and the future. Is history always doomed to repeat itself, or will the future be vastly different from the past? Is looking into the past the best way to predict the future or is such an approach as flawed as looking through […]