A primer on how equity supply can influence returns City Talk Like any good or service, we think share prices—whether of an individual public company or a national or global equity market index—rise and fall based on the interaction between supply and demand. In the relatively near term—which we define here as the next 3 – 30 months or thereabouts—our research indicates demand tends to be [...]
A primer on how equity supply can Influence returns City Talk Like any good or service, we think share prices—whether of an individual public company or a national or global equity market index—rise and fall based on the interaction between supply and demand. In the relatively near term—which we define here as the next 3 – 30 months or thereabouts—our research indicates demand tends to be [...]
Why broadening your definition of risk might prove beneficial City Talk Risk. Many financial commentators and industry professionals agree it is one of the most important considerations for any investor. In our review of financial media, we see near-constant coverage of it—particularly the risk of loss. Commentary often dwells on the potential for current events to drive equity market declines, warning risks lurk. We, too, [...]
Stocks care about policy, not personalities August 6, 2018 Chaos in the Trump White House! First, Gary Cohn resigned as Director of the National Economic Council. A couple days later, President Trump fired Foreign Minister Rex Tillerson. Then we saw Scott Pruitt also step down. Some claimed these losses would cause markets to lose confidence in the administration. Hogwash! These are examples of some [...]
Funny thing about those inflation fears June 27, 2018 Inflation! A topic that is commonly on everyone’s mind. In February 2018, pundits shrieked rising wages meant that the world economy was overheating. Rising interest rates to come! Analysts blamed price fears for stocks’ decline. Yet one month later, when new data showed no inflation spike, no one cared. Weird! But typical of corrections. Volatility [...]
Hold tight when volatility strikes June 6, 2018 Ouch! At the end of March the FTSE 100 had its worst day since the end of 2016. The rally since then, however, demonstrates that you should fight the urge to sell during these short pullbacks. Bull markets die with a whimper, not a bang. Big bounces usually follow sudden selloffs. This was classic correction-type [...]
An underappreciated side effect of Brexit talks March 23, 2018 As the Brexit referendum nears its two-year anniversary, Brexit continues dominating economic and political media coverage. We have observed no shortage of angles, including: What is the latest snag in negotiations? Will Brussels and London make their deadlines? Can Prime Minister Theresa May keep her cabinet in order? We believe this nonstop Brexit coverage obscures [...]
The folly of long-term forecasts March 2, 2018 In late January, Brexit minister Steve Baker suggested the Treasury had put together 15-year economic projections designed to show “all options other than staying in the customs union were bad.” Though he later walked the statement back, to some, it supported suspicions of government agencies’ complicity in “Project Fear”—an effort to scare Brits out of [...]
Brexit didn’t break the UK in 2017 January 25, 2018 When the UK voted to leave the EU in June 2016, many experts forecasted economic doom—if not immediately, then in the not-too-distant future. Some sentiment-related, short-term volatility followed, but the UK didn’t fall into recession following the referendum. Similar projections arose going into 2017, but those fell flat, too. Through all the noise and warnings [...]
Are UK markets overstretched? December 21, 2017 With the FTSE 100 and All-Share a wee bit below their all-time highs and valuations above average, many fear equities are too high and will soon fall. However, in our view, such worries are misplaced. Valuations aren’t predictive, and markets routinely set all-time highs during bull markets. We expect UK markets to keep making chart-topping [...]
