Perspectives
Itchy Fingers
June, 2018
We’re often asked why we don’t make more changes to our strategies. It’s a fair question. The fact is we haven’t altered our core holdings in over a year. To an outsider this might look like we’re busy doing nothing. But our view is that a considered decision not to change holdings is in reality […]
The True Value of Gold
June, 2018
There are over 100 billion galaxies in the visible universe. The Milky Way galaxy, where we live, consists of more than 300 billion stars like our own sun. Some of these stars will have a few planets revolving around them similar to our solar system. A few of these planets will be the right size, […]
Italy, politics and Super Mario
May, 2018
“There is no better protection against the Euro crisis than successful structural reforms in Southern Europe.” Strong words from Mario Draghi, the President of the European Central Bank. But what he didn’t forecast 6-years ago when he made the comment was the political power grab in Italy by a far right, anti-immigration party combined with […]
Spurious Correlations & Interest Rates
May, 2018
Did you know that two things can be strongly correlated and yet completely independent of each other at the same time? We love relationships – even relationships that aren’t there. Maybe it’s a human need. The website spurious correlations has a lengthy list of absurd correlations. For example, the number of Nicholas Cage films in […]
Regulation & the Attention Economy
May, 2018
Starting in the early 1900s, automobiles and air travel transformed the world by making it a smaller place. In the early days, these industries were the wild west with lax safety regulations and frequent accidents. As the transport industry became increasingly important, regulatory scrutiny led to an increase in the number of regulations. The first […]
Boring Banking
May, 2018
“If we want things to stay as they are, everything will have to change”. The most famous line in “The Leopard” by Giuseppe di Lampedusa illuminates the paradox at the heart of investment. Of all the moving parts that comprise a modern economy, finance is the most conservative activity least amenable to innovation. Indeed, when […]
Beating the Market
April, 2018
Physics envy has done a lot of harm to economics and the humanities. This probably happened because of the astronomical leaps in physics starting with Newton in the 18th century where he predicted the motion of distant planets and Einstein in the 20th century where he showed the random motion of atoms. If physics could […]
Haven Currencies
April, 2018
In September 2017, North Korea fired a missile over Japan and yet somehow, the value of the yen went up. The threat of a possible war could not change investors mind about the safe status of the Japanese yen. Was this caused by a reversal of a carry trade or because everyone views the yen […]
The limits of intuition
April, 2018
Human brains have been wired through years of evolution to think intuitively. This fast, emotional and automatic way of thinking was useful for our ancestors in navigating the Savannah of East Africa and escaping lions. If a lion was chasing you, spending too much time deliberating whether it is friendly or not wouldn’t end well […]