Perspectives
Squaring the Political Circle
November, 2020
With all eyes focussed on the US election this week it is vital for investors to understand the implications, short, medium, and long term, of the results of the Presidential race. No formal winner has yet been announced but whichever candidate wins, it will be by slim margins in several key states. This will not […]
Debt Doldrums
October, 2020
Every financial crisis is marked by the failure of supposedly infallible corporate behemoths. In 2001, it was Enron. In 2008, there were several – Freddie Mac, Fannie Mae, Lehman Brothers and Bear Stearns. On this side of the pond, it was the collapse of HBOS. Every bull market has its poster child of corporate excess, […]
Sustainable Investing
October, 2020
Environmental factors have become more and more important to investors as the science has highlighted the impact of their (our) actions today on future generations. At Tacit, we spend a lot of time considering the implications of changes in peoples’ behaviour on asset prices. Ultimately, demand and supply dictate prices and any change to either […]
Growth Opportunities
October, 2020
We recently wrote about the role of the Growth portion of our Stabiliser and Growth asset mix. The Growth component of the portfolio is ultimately responsible for, as the name implies, generating growth. It is mainly comprised of equities. A good framework for evaluating the future growth opportunities of a company or an industry is […]
Keeping Track of Brexit
October, 2020
Many years ago, C Northcote Parkinson examined company decision making in his still delightfully relevant book “Parkinson’s Law.” In the book he described how a company board could spend hours debating the merits of a proposal to give the employees a new coffee machine but could sign off on a new nuclear power plant in […]
Income Trap
October, 2020
Yields from government and corporate bonds continue their precipitous decent and major central banks implement negative interest rate policies, pushing interest on bank deposits further down. Even dividends, as this year has shown, can be fickle. The question of how one can safely generate an income stream from an investment portfolio without taking on excessive […]
Growth Always Comes with a Risk
September, 2020
We write a lot about risk. Risk means different things to different people: for example, to an architect the risk may be that a building is not pleasing to the eye once built, to a President the risk could be not getting re-elected, whilst for an investor risk could be missing out on market rises […]
The Death of Value?
September, 2020
Equity investors can be put into two distinct types: those that try to unearth future potential that others do not yet recognise (growth investors) and those that believe the market is undervaluing a company based on its intrinsic worth (value investors). Over the past decade many traditional value investors have struggled as the evolving economic […]
Perspective Changes with Distance
September, 2020
In our school days it was orthodox to treat the periods 1901-1914, 1914-1933 and 1933-1945 as discontinuous and distinct periods of history. Today historians regard the end of the Edwardian period in the UK to the fall of Germany in 1945 as a continuous period of great power competition with Versailles and Weimar the pivot […]
The Limits of Growth
September, 2020
Since the start of the year, one area of the market that has delivered phenomenal returns to investors, in spite of a global pandemic, poor economic growth and rising geopolitical tensions is compounder type businesses and companies claiming to be compounders. What exactly is a compounder business? They have three main characteristics. First, they tend […]