In Warren’s defence
The Financial Times recently wrote an article, asking “has Warren Buffett lost his touch”. Do we agree? Read on to know more.
COVID implications for the commercial aviation industry
From cancelled flights and cancelled aircraft orders to frenzied air freight markets, the fallout from the COVID-19 pandemic has been unprecedented. Here we outline some of the implications of the coronavirus for different corners of the commercial aviation industry.
Digital transformation still has a long way to go
While digital might seem ubiquitous, there is still tremendous uptake to come. Outside of standard broadband access, all other digital technologies remain less than 50% penetrated by enterprises.
Why are we paying taxes?
Explore the interesting concepts of the Modern Monetary Theory (MMT). Under this economic theory, it is explicitly acknowledged that governments who issue debt in their own currency cannot default. Ever. So then why exactly do we need taxes?
Beware Expensive Equity Raises
Seasoned experts have commented on the stock market risk while it remains disconnected from the real economy. Our latest red flag comes in the slate of equity capital raises that have flooded the market on the back of investor excitement, meanwhile share buybacks are drying up.
A Troubled Train Manufacturer
The European Rolling Stock industry is undergoing a rapid transformation as the shift towards automation and driverless technologies force manufacturers to innovate. In this article, we examine how one pure-play manufacturer is faring in the face of this structural trend.
Draining an Ocean of Liquidity
An abrupt change in macro liquidity may be occurring with the potential for a vacuum, as the U.S. Federal Reserve slows its bond buying programs just as the U.S. Treasury accelerates issuance. This may mean the liquidity tide created when the Fed commenced it’s “unlimited” purchase program, would start going out to sea, and possibly leave behind more organic price discovery in markets.
Why Shorting Pie in the Sky Is Dangerous
While overvaluation is a necessary component to a great short, it alone is insufficient to tilt the likelihood of the short position working out in your favor. The danger of shorting such stocks is the immense damage that can be done in the interim from bullish investors having a set of conditions that allows them to remain bullish.
Earnings Still Matter
Despite the hindered economic and business activity round the world, the equity markets have continued to rise. This superficially suggests that the equity market does not seem to care about earnings – yet. History shows that in the long run earnings will still matter.
What is our “variant perception” to the market?
As equity markets continue to rise, investors are slowly getting nervous about the upside potential from current levels over the short and medium terms. We at Montaka do see downside risks in equity markets near-term.
