Here comes Helicopter Ben
The economic development over the past few weeks bearing the greatest potential unintended consequences was not Brexit or the unfolding Italian banking crisis, but rather the secret meetings between former Fed Chairman Ben Bernanke, Japanese Prime Minister Shinzo Abe, and Bank of Japan Governor Haruhiko Kuroda. While held in private, it has been widely speculated […]
Augmented reality has arrived
Unless you live under a rock, you surely have heard of something called “Pokemon GO”. It is a new mobile game that was released by Niantic Labs on Apple and Android phones in the US, Australia and New Zealand just one week ago. Reports from SimilarWeb emerged this week that Pokemon GO had already overtaken […]
Is Investing the Same as Gambling?
Investing can take many forms, but it typically involves buying an asset for less than it is worth. Regardless of the form the investment takes, when determining the value of any asset it is important to think probabilistically – that is, acknowledging that there are many possible outcomes that can eventuate in the future. So […]
The Double-Edged Sword of Operating Leverage
Operating leverage is an important concept to consider when analyzing any business, mainly for its potential to cause unexpected step-changes in the earnings of a company. It is crucial to understand what exactly operating leverage is and the implications that it has for identifying investment opportunities. The chart below breaks down the elements that combine […]
Brexit Hedge
On Thursday Britons will cast their votes on whether or not they want to be part of the European Union. Speculation around the result of the Brexit referendum, which is far from determined even at this late stage of polling, has driven significant volatility in the value of the British Pound and UK equity prices […]
What could you buy with €1 trillion?
If you had €1 trillion to spend, do you think you could spark some inflation in your economy? The European Central Bank (ECB) certainly did. A trillion euros is a lot of money. A thousand billions, or a million millions. It’s almost impossible to comprehend how much money that is. Interestingly, one trillion euros is […]
Making sense of the US economy
How is it that, in the world’s largest economy, unemployment is down, the housing market is strong, the Fed has started to raise rates – and yet, the agricultural sector is in a downturn more severe than during the Global Financial Crisis (GFC)? It’s somewhat of a contradiction to say the least. The US economy […]
Is the iron ore price rally sustainable?
Since late last year, the iron ore price has rallied by more than 50%, increasing from less than $40/tonne to approximately $60/tonne today. It has coincided with renewed optimism (by some) over a return to the credit-fueled fixed-asset-investment-led growth model that has characterized China over the last decade. Should Chinese policymakers instruct their banks to […]
The US oil boom that debt built
We follow economic drivers that impact your equity returns very closely here at Montaka. One of the key economic drivers that is impacting many global industries and markets is the oil price. We have written about the oil and gas space before, which can be found here, here and here. As we have noted in […]
Accounting for the GAAP in reported earnings
The importance of accounting cannot be overstated in the eyes of the Montaka research team. Accounting is the lens through which the underlying economics of a business are viewed. If this lens is distorted, the perception of a business’ health will be somewhat distorted too. One of the four characteristics we look for in an […]
