There were a couple of pieces written in the media in 2016 suggesting that the year represented a tipping point in the shift from active to passive management, both in equities and fixed income markets. Whether or not this is true, when it comes… Read the article
Category: Investment Industry
Could it be that professional investors are chasing year end equity returns to flatter calendar year performance? And does this set us up for a weaker January as those same investors unwind positions they might not really believe in?
As equity markets have continued to rally there has been a… Read the article
Stuart Fowler, one of the most lucid commentators on the investment industry, clearly explains the problems faced by all investors looking for a manager to run their money:
“Assume [the investor] believes that there are [skilled managers]…Now she needs either to select the managers herself or to select an… Read the article
(I) Bond/equity correlation:
At our recent quarterly investment offsite, an interesting debate arose on the correlation between bonds and equities. One participant suggested bonds and equities in the US had been positively correlated in recent years, while another was firmly of the view that they had been negatively… Read the article
After the UK referendum on EU membership, attention for many now turns to the next “event”: perhaps the next meeting of a major central bank, Italy’s referendum on constitutional reform, or the US presidential election. You can be certain each of these events will generate considerable… Read the article
For a long time after 2008, asset prices suggested that most investors believed low interest rates to be temporary. The most common view, whether conscious or subconscious, seemed to be that once we were ‘out of the woods’ things would return to normal.
We have written before about how this… Read the article
Behavioural finance is often associated with looking for instances of overconfidence. Most examples show that human beings are too pessimistic or optimistic, or simply understate the chance that we will be surprised. But sometimes we can also observe instances when confidence is unusually low. This is what I believe we… Read the article
The range of products available to investors has exploded over the last 50 years. Greater accessibility to different asset classes or instruments like commodities has played a part, but the rise of new strategies and vehicles has been the biggest factor.
Strategies differ from asset classes in that they represent… Read the article
At the start of May, Tony Finding and Eric Lonergan made their annual ‘pilgrimage’ to Omaha in the US to attend the annual shareholder meeting for Berkshire Hathaway, the investment company run by Warren Buffet. In the second of two blog posts, Eric discusses his key takeaways from the experience.… Read the article
Michael Lewis’ accusations aimed at high frequency traders (“HFTs”) can be seen as a revelation that strikes at the very core of the problems of the incentive system behind today’s financial markets, or a cynical and misstated attempt to sell a new book.
The reality is probably that… Read the article