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 […]
Are your biases costing you money?
It is interesting to think about the way we think. Humans are constantly processing new information and forming conclusions believed to be true. For investors, the validity of these conclusions makes the difference between profit and loss. So it is important to be aware of the tricks that your mind plays on you. And it […]
How do your stocks rate in a low rate world?
Here’s the deal: you lend me $100. I pay you back $100 in the year 2066 with no interest in between. Does that sound fair? Would you take that deal? Well that’s what the Swiss government is currently offering – and many investors are taking it. We are living in a very strange and unprecedented […]
Checking in with China
While the S&P 500 is hitting new all-time highs, we look through the euphoria and remain focused on the global risks that continue to persist and are important for global equity investors. Readers will know only too well that we have serious concerns over the nature of China’s growth model and the resulting build-up of […]
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 […]
