Perspectives
Known unknowns and Unknown unknowns
September, 2023
Humility is at the heart of sound investment. This isn’t a virtuous choice on our part, nor are we meek or particularly self-deprecating. It’s simply a clear-eyed acknowledgment of the uncertainties of the world in which we invest. We may have discovered a ‘perfect’ stock by diligent analysis of solid balance sheet facts but the […]
Real Returns
September, 2023
Our focus at Tacit has always been to generate ‘real’ returns for our investor clients over the medium to long term. Achieving this requires an understanding that generating positive real returns is empirically difficult, come s with risks over the shorter term and is not achieved in a linear straight line fashion. The table below […]
The Pace of Innovation
August, 2023
Do you remember the Cathode Ray Tube, Betamax, CDs, the Blackberry or even the Apple Newton, the early electronic personal organiser from the days when Apple had to be rescued from bankruptcy by its dark nemesis, Microsoft? Some of us still have our Psion 5’s, a living piece of post-industrial archaeology. It is a cliché […]
Pascal’s Wager
July, 2023
Do you believe in God? Whether you or do or do not, the seventeenth century French mathematician Blaise Pascal argued that you should, in what has become known as Pascal’s wager. If God does not exist, belief in Him leads to small, finite losses. On the other hand, if He does exist, then disbelief may […]
Picture this…
July, 2023
There was a moment in the mid-1980s when the growing demand for financial futures was such that the Chicago futures market couldn’t build the open-outcry trading areas fast enough to meet the required for trading space. The three-month Eurodollar deposit contract was particularly popular. A crush of brokers clerks and traders would balance precariously on […]
The difference between saving and investing.
July, 2023
Investor sentiment often fluctuates as financial markets oscillate through the elation of good times, (when investment returns are abundant and easy to come by), or the pain of bad times (where wealth has been adversely affected and investing can feel daunting and uncertain). It is during these bad times, where short-termism can often lead to […]
The price of everything, but the value of nothing
June, 2023
The US equity market has consistently traded at a premium to all other developed equity markets over the past 20 years. This is a difficult circle to square for many investors as history shows that higher valuations generally lead to lower future returns. We focus very much on the valuations of assets today but must […]
Tackling inflation
June, 2023
This week we had our quarterly investment conference where we review global macro-economic data with a view to gauging the impact of emerging economic trends on our investment strategies. One of the observations that came out of the meeting was that the actions taken by central banks this year to combat rising inflation are beginning […]
Banks are a lazy answer
June, 2023
Ever since the financial crisis of 2008, banks have been an easy target for many commentators, including us at times to be fair, when we talk about the ‘risks’ that might disturb investment markets. Banks are, by definition, complex, opaque businesses. Many of their revenue lines rely on them being so. If everybody knew how […]
Why did the central banks get it so wrong?
June, 2023
At a client meeting this week we were asked why the central banks have made such a hash of managing inflation over the past two years. This is an interesting question to us, as we believe the answer to this question is rooted in the global response to the financial crisis of 15 years ago. […]