Mark Twain remarked that “history doesn’t repeat but it often rhymes”. He’d probably never been to Argentina. A year ago, it issued $2.75bn of debt at a yield of 7.9% in a capital raising that was 3.5x oversubscribed. The duration of this bond (its life) was 100 years; a detail that Gillian Tett, writing in…

Investors will be well aware that world stock markets have been rattled over the past couple of weeks. Chatter about a mini crash came naturally after Wall Street shed 6% in a single session. Various culprits were rounded up; rising U.S. Treasury bond yields, simmering inflation, Oxfam, the reduction of central bank stimulus and the…

So, Donald Trump will soon be sitting in the Oval Office. The BBC’s period of official mourning still has a week to run but from Silicon Valley to Islington (via Hollywood), the liberal left remains in a state of shock; if only the ‘deplorables’ couldn’t vote, Hillary would be President with Beyoncé and Jay Z…

The French fund manager, Jean Marie Eveillard, states “a good value (i.e. patient) investor aims to buy investments at prices that are less than they are truly worth and accepts there will be periods of short term pain. It is one reason why there are so few good value managers. It is not just psychological;…

The Bank of Japan has just cut its overnight interest rate from 0.1% to minus 0.1% while Sweden’s Riksbank took its lower still from minus 0.35% to minus 0.50%. The Japanese have therefore joined the club that the Swedes already belonged to, along with the Danes, the Swiss and the European Central Bank. Even U.S.…

Cast your mind back to those halcyon days when storms were nameless. Your dustbins were not only emptied regularly but actually returned to whence they came. Potholing was a weekend leisure activity rather than a description of your drive to work and it was possible to walk the length of the high street without being…

For investors, risk and return are Siamese Twins; you can’t obtain the latter without the assumption of the former. As a firm, we are occasionally chided (in a friendly way, it should be said) because when it comes to the deployment of capital, we prefer to focus on what might go wrong rather than hope…

Forget what they say, it’s what they do that matters. A point reinforced by the tale of the Reverend Paul Flowers. A man whose credentials should have been impeccable now has questions to answer regarding historic expenses irregularities, consorting with rent boys and buying crack; there are also drugs allegations. Multiple ironies abound here; the…

There will soon be a changing of the guard at the U.S. Federal Reserve as Ben Bernanke hands the reins (together with the paper, ink and printing press) over to Janet Yellen. Regarded as a ‘dove’ rather than a ‘hawk’ (i.e. she is more concerned with unemployment than inflation) it is highly unlikely there will…

It’s interesting how the appointment of a new broom can lead individuals to, well, change their minds. I suppose psychologists would say it is somehow related to the ingrained desire to seek shelter with the crowd. From the dawn of human existence on the plains of the Serengeti, mankind’s survival instinct decreed that the odds…

Value can be a frustratingly transient concept. It is documented that at the height of tulip mania in 17th century Holland, an Amsterdam town house was exchanged for a solitary bulb. Similarly, my daughter’s bedroom is often a tip and yet if she shared it with Tracey Emin, it would become art. As for those…

As a child, my favourite fairytale was Hans Christian Andersen’s ‘The Emperor’s New Clothes’. Upon reflection, I suspect this was because it chimed with reality where nonsense can persist indefinitely if individuals are afraid to look potentially foolish by challenging accepted orthodoxy. I was reminded of Andersen’s tale by the sight of numerous art experts…

We live in strange times. Never, in the furthest reaches of my imagination did I ever expect to see the words ‘Pussy Riot’ on the front pages of both the Daily Telegraph and Financial Times and yet, it came to pass. We also live in an age where people are assumed to be increasingly gullible.…

There was an old Soviet joke. The telephone rings at Cosmonaut Yuri Gagarin’s house and is answered by his daughter. She explains that her father is currently orbiting the earth but is due back at 7.00 pm. Her mother is also out but as she has gone shopping for groceries, it’s impossible to say when…

The advert for Barclays’ tracker rate mortgages urges borrowers to ‘take one small step’. Although hardly on a par with Neil Armstrong’s efforts, Bob Diamond did exactly that in the wake of the bank’s £290m fine for attempting to rig LIBOR. It is, without doubt, a sorry tale. A potent cocktail of power, laced with…

Warren Buffett observed that investors should look for companies that are so bulletproof, an idiot could run them because one day, that is probably what will happen. If he is correct, we conclude that if capitalism is likely to let the odd wally hop into the driving seat, then it’s a cast iron certainty that…

Sometimes it’s difficult to put exact numbers to things you know are vital. Warren Buffett, the billionaire investor, tells us “valuing a business is part art, part science”. He means that the art part of the equation is a bit woolly because it relates to matters such as quality of management or brand value, which…

Last December, the ratings agency, Standard & Poors (S & P), placed the debt of all 17 Eurozone nations on ‘negative watch’. This may sound sophisticated but in a nutshell, it is saying that the debt of these countries is not as solid as many (including S & P) thought originally. Even Germany was caught…

It was Robert Louis Stevenson (among others) who noted it was better to travel than arrive. Having flown with Ryanair, I would beg to differ. However, the disappointments of budget airline travel, the Pringles costing more than the ticket and the embarkation scrum resembling a scene from ‘Zulu’, pale into insignificance when considering the journey…

On numerous occasions we have referred to how the precarious state of the global economy is, in no small part, the result of ‘experts’ having a bit less expertise than either they thought or indeed, others attributed to them. A single currency for wildly differing economies? Check. Levels of sovereign debt that, realistically, can never…

It is comforting to know that high street financial institutions just want to hold our hands and guide us through life’s trials and tribulations. NatWest delivers ‘helpful banking’ and Lloyds is with us ‘for the journey’. Santander and its customers are ‘together’ while Halifax offers ‘a little extra help’. The warm fuzziness tends to disappear…

Well, there has been plenty going on. The country overwhelmingly rejected a change to the voting system, U.S. government debt was earmarked for a potential downgrade by the rating agency, Standard & Poors, while Gordon Brown fancied running the International Monetary Fund (IMF). To cap it all, Leeds United failed to make The Championship play-offs.…

It is all too easy to assume that individuals in positions of power know what they are doing. I recently saw an anonymous quote which opined that when you are young, you assume the world is generally organised along sensible lines. However, as you get older, you realise just how random and chaotic it truly…

It has been a miserable few weeks. Education riots, VAT at 20%, while to cap it all, Russia snaffled the World Cup. While we fielded Beckham, Cameron and Prince William for the big push, Vladimir Putin didn’t even feel the need to attend the final schmooze fest. To add insult to injury, they then sent…

When I was a boy, QE2 was the acronym used to describe a ship owned by Cunard. Now, it’s the next chapter of U.S. monetary policy. The QE2 of today refers to the second part of the U.S.’s programme of quantitative easing. For the next few months, the Federal Reserve intends to buy another $600…

In Oscar Wilde’s ‘The importance of being earnest’, Lady Bracknell tells us “… to lose one parent may be regarded as a misfortune; to lose two looks like carelessness.” Today, such bluntness would be called bullying and if done in the workplace, might give HR something to do for the entire week – or even…

It is a persistent problem. In the middle of the night, you are rudely awakened by a knock at your hotel door. Is the building on fire? Has your car been stolen? No; nothing so dramatic. It’s just a couple of strangers offering you a bag of diamonds. It happens to me all the time.…

There are well over half a million words in the English language. You might have thought that with all that choice, it wouldn’t be too difficult to make a decent stab at accurate description. Yet, curiously, modern life appears to struggle increasingly when it comes to conveying the essence of reality. Of course, there are…

Wise words from Bob Dylan. While I’m hardly an expert on 1960s counterculture, he meant (I think) that the answers are often there but, you must have the wisdom to notice them. It’s akin to reading between the lines rather than what is written on them. Investing can be similar. It is all too easy…

It has often been said of economics that while the questions remain the same, it is only the answers that change. The obscure Victorian economist, Thomas Carlyle, described economics as a ‘dismal science’. We venture he was wrong; it’s not a science at all. While I have a degree in the subject, I realised long…

In Hotel California, the Eagles tell us “we are all just prisoners here of our own device ……. you can check out any time you like but you can never leave”. While it’s not impossible Messrs Felder, Frey and Henley were referring to the reality of 1970’s Californian hedonistic indulgement, it reminded us of the…

Things aren’t always what they seem. A thought no doubt not lost on Accenture and Gillette. Both firms had promoted themselves on the back of Tiger Woods’ squeaky clean image. After paying him millions, it probably came as a shock when it became clear that his idea of playing a round didn’t always involve a…

Throughout history, gold has held an unshakable hold over the human psyche. From Midas to the Spanish Main, from Cecil Rhodes to… er, Spandau Ballet, gold has retained its allure. Auric Goldfinger was even prepared to render the contents of Fort Knox radioactive in order to profit from the resulting price hike. Of course, there…

It’s our view that the world economy is still concealing plenty of unexploded ordnance. Whether it detonates is another matter but every now and again we get a reminder that all is not as well as some would want us to believe. Greece has been the latest member of the Eurozone to feel the heat…

Mark Twain said “Whenever you find yourself on the side of the majority, it is time to pause and reflect.” Clearly, it’s not a problem we have to confront too often but then, our job is to invest prudently over the long term and not chase moonbeams by confusing clients’ capital with roulette chips. For…

Britain has, at least in a technical sense, finally emerged from recession. Most industrialised nations have been posting anaemic growth in Gross Domestic Product (GDP) but Albion has lagged persistently. The Chancellor believes we are on the cusp of recovery but then, in the summer of 2008, he opined that we would escape recession, the…

Markets keep rising but so does unemployment. Governments print money although the vast majority of it leaches into speculative capital market trading rather than worthwhile economic activity. Record low interest rates will both provoke and sustain economic recovery yet inflation will not be the result. The inconsistencies just keep on coming. At the Labour Party…

An acquaintance of ours asked us recently why, unlike the majority of investment managers, we weren’t talking the stockmarket up. We explained it was because longer term economic fundamentals will make real progress difficult. We weren’t talking it up pre recession and we will not do it now. We are advisers, not cheerleaders and we…

We have always invested a good deal of time ensuring that our clients understand our investment thinking, both in the short and longer terms. While we have been clear about how we viewed the events of the past couple of years, together with our expectations for the future, there are times when it merits amplification.…

This year, the Euro celebrated its tenth birthday. It was launched with great fanfare on the 1st January 1999; Rudolf Erlinger, then Chairman of the EU group of finance ministers proclaiming “we are standing at the dawn of a new era”. Portugal declared it was delighted while Finland was honoured. Perhaps sensing where this all…

Experts; where would we be without them? A lot better off is our guess. We’re not talking here about real experts like doctors, dentists, pilots or plumbers; individuals that deliver worthwhile services. No; we refer to those experts that make a lucrative living despite being persistently wrong. The investment industry is full of them but…

Once upon a time, economic prosperity was the result of a high savings ratio combined with sweat and risk taking. Victorian Britain pioneered it while the U.S. was built on it. Thrift created the funds that could be re-cycled via the banking system which, in turn, begat further wealth creation. Obviously, this commendable model contained…

It is a great comfort to know that those who were playing blind man’s buff while the economic crisis was fermenting now see a swift recovery on the horizon. Ben Bernanke, Chairman of the U.S. Federal Reserve, said recently “the U.S. economy appears to be stabilizing on many fronts and that recovery is likely to…

In recent years, Budgets have been rather boring, a mirage of prosperity rendering them a sideshow. However, last month’s crossed the Rubicon. The Chancellor believes there will be a rapid economic recovery and while the economy will contract by 3.5% this year, he plumps for growth of 1.25% in 2010 followed by 3.5% in 2011.…

In order to fund its massive borrowing requirements, the government has been selling bonds (gilts) to investors. However, last month, for the first time in seven years, there were not enough buyers for the £1.75bn of bonds offered for sale. In short, not enough potential investors were prepared to stump up for the returns on…

Remember Prudence? Go on, think back, you know her. She was that fresh faced, well mannered girl. There was a time when you couldn’t miss her but she hasn’t been around for years now, which is a shame because we really liked her. Looking back, she never truly recovered after being jilted by that politician…

The UK is now facing a severe economic contraction. While we chose to ignore the comments of politicians and bankers on both sides of the Atlantic, who routinely alluded to the strength of the global economy, there is no question that, economically speaking, we are now in uncharted territory. Governments have attacked the problem by…

The American writer Gore Vidal, once remarked that “it was not enough to succeed, others must fail”. I suspect recent comments by the German Finance Minister, Peer Steinbrück, confirm Mr Vidal’s observation. With typical teutonic efficiency, the German language already had the perfect word to describe the problems affecting the Ango-Saxon economies; schadenfreude. After years…

Those old wives knew a thing or two. A stitch in time does save nine. The road to hell is paved with good intentions and if you give a certain type of individual sufficient rope, they usually end up hanging themselves. Interestingly, such people often show up in politics or finance. Several of the world’s…

It has taken six months but the final chapters of the Northern Rock saga are about to be written. The first run on a bank since the 19th century will end in nationalisation by a government that was desperate to avoid taking such action. There will likely be legal moves, spearheaded by the two hedge…