Treating countries like companies
The hare and the tortoise again
With speculation that investors are lining up to stag Anthony Bolton’s China Special Situations trust at its imminent IPO as they did during the technology bubble a decade ago it’s worth looking at the story behind the excitement.
In the late 1990’s the notion that the Internet would change the world [...]
Putting investing heroes in their place
[This is a transcript of a podcast originally recorded in October. If you prefer to listen to it, it’s here .]
I’m grateful to a colleague of mine, Peter Temple, for writing an article that’s reminded me of the debt I owe another Peter, Peter Lynch.
It was Lynch’s book ‘One Up On Wall Street’ that inspired [...]
Gold is not for Grandma
[This is a transcript of a podcast originally recorded in December. If you prefer to listen to it, it’s here Since then the gold price has been down and up, but it’s pretty much where it was.]
Contrary, to the popular conception, value investors are optimists. Yes, like vultures we lurk around troubled companies where [...]
2010: An Investing Odyssey
A long, wandering and eventful journey.
There’s not much point in rehashing 2009. If you hibernated through it you missed a good whipsawing by the stock market and your investments are probably doing much better than they were at the beginning of the year. If you panicked at the beginning of the year and sold [...]
State of the Market
Neither hot nor cold.
[This is a transcript of a podcast originally recorded in October. If you prefer to listen to it, it’s here Today the FTSE All-Share is slightly higher, but not enough to change the analysis.]
So, the FTSE All Share is up 850 points from 1,800 to 2,650 in round numbers since its [...]
The New Dark Age
Thinking about the end of capitalism
The last two weeks I’ve been thinking about gold, which is painful because it’s a kind of anti-investment. It increases in value when we lose confidence in the economy. People turn to gold when most other assets, from copper to companies, are expected to lose value.
The problem is, collective expectations [...]
Even if gold could be worth $6,300 I’m not buying
Gold, it’s glittering
Everybody’s talking about gold. The financial Internet is yellowing by the day as pumped-up hedge fund managers, bloggers and analysts dream up reasons to buy gold bars, gold coins, gold ETFs, gold mining shares and, most probably, the gold fillings from dead people’s mouths.
Through a canny little site called bit.ly I can [...]
Big name stocks for all seasons
Magic squared
Things are looking up for the stockmarket according to Edmund Ng, an Analyst at Morgan Stanley. In a research note published the day before Halloween, he recommended investors buy shares in quality, stable, growth companies that typically perform well in bull markets.
During the panic culminating last March, investors abandoned companies with weak finances, and [...]
Blame it on Bachelier
A random walk into recession
You’ve got to watch these two interviews with Benoit Mandelbrot:
part 1
part 2
Mandelbrot saw the financial crisis of 2007 coming, He couldn’t have told you exactly when or how it would happen. His achievement was simply in recognising that big, and sometimes destructive events do happen in financial markets.
Maybe [...]
Reward, without the risk
In theory:
The holy grail
Contrary to conventional notions of risk and reward, buying shares in safe companies really does improve returns. That’s the message from a research note published last year by Morgan Stanley.
It published an alluring chart, which depicts what goes on over a stockmarket cycle (click on it for a larger version):
The story [...]
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