A key risk for 2018
We all know the global equity market has been on a straight-line incline over the last 12 months. Naturally, this makes us nervous. Therefore, we are spending considerable time pressure-testing our mental model of the world to identify potential scenarios that could mark the return of market volatility. One risk we are considering relates to […]
What does Lord King have to say?
This week, we had the privilege of listening to a Q&A session with Lord Mervyn King. Lord King is obviously a highly-intelligent and enormously experienced global economist – having governed the Bank of England for the ten-year period ending in July 2013. For readers who are interested, we share some of Lord King’s views below.
Isn’t this what Adam Smith intended?
Do you believe in economic policies that help consumers? Or what about policies that help business owners? Or policies that help employees? Why not help everyone? The problem is, no matter how good your intentions are, you simply cannot. In many cases, what is good for one group of people is bad for others. In […]
The new phase of big data – part I
“The world’s most valuable resource is no longer oil, but data”, read the cover story of the Economist earlier this year. After recently hearing from a number of companies at a technology conference in New York, there was a strong recurring theme that seemed to fit that sentiment: data is becoming increasingly important and firms […]
How long will your pay rise last?
Since the beginning of the new year, Australians have received around a 10 percent pay rise. But this is not your typical pay rise. This pay rise does not result in more dollars in your bank account. Nor does it mean you can afford a bigger Australian home. So what kind of a pay rise […]
Demand for planes will keep Airbus flying for decades
In late June of this year Le Bourget Airport in north Paris played host to the 52nd Paris Air Show. The event is held every other year and provides manufacturers – primarily Airbus and Boeing – the opportunity to showcase their aircraft to potential customers and, more importantly, to negotiate deals for new planes. This […]
Who are the businesses of the future?
In football, a successful player does not run to where the ball was, or where it is right now. They run to where the ball is going to be. The same idea is followed by successful investors. They are typically less interested in the successful businesses of yesteryear, or even today’s success stories. For successful […]
Are there cracks in the U.S. auto industry?
The U.S. auto market has experienced a strong resurgence since the Great Recession. The seasonally adjusted annual rate (SAAR) of U.S. auto sales has gone from around 9 million units in the depths of 2009, to above 18 million units in December 2016. However, this strong growth in auto sales in recent years has coincided […]
Does the “new normal” call for active management?
For years now, there has been an almost-structural increase in the amount of capital allocated to passive equity index funds; and a corresponding decrease in the amount allocated to active equity funds. The rationale has been simple: passive funds are typically much lower cost and their returns have outperformed most active funds over recent years. […]
Will our debts keep rates low?
How to make sense of the strange new financial world in which we find ourselves? It is a seriously challenging question. There is currently around US$15 trillion of negatively yielding government bonds in the marketplace. Furthermore, some corporates have started issuing debt at negative yields (as shown below). This is unprecedented. With yields in global […]
