Hyman Minsky, an economist in the early 1900s, like many others of his era, has largely been ignored and forgotten by the modern school of economic and monetary theory. Minsky largely dedicated his career to his “financial instability thesis” in which he predicted a form of corporatism where vast profits are privatised and vast losses […]
“Inflation is taxation without legislation” Milton Freidman The view of economists and investors of inflation is split. There is the camp that believes it will continue to rise and be sustained for the immediate future and beyond; and those who believe tightening of money through interest rate hikes by central banks, a recession and other […]
As stock market prices have sharply declined this year, many investors have sold into a declining market. Many live in an extreme state of anxiety while prices continue to fall further and their pension plans and investments post losses at a time when the cost of living has increased and the policy of central banks […]
We must understand what’s the best for us, not for anyone else Written in 1750 by Adam Smith, whom many consider to be the father of economics, these wise words speak to our appetite for risk and our human propensity for making emotion-driven behavioural errors. To be a truly successful investor the central challenge is […]
Concentrating our allocation of capital on a few names or big ideas makes us feel like geniuses when prices are rising – and fools when prices fall sharply and keep on falling
While gold has been sound money for thousands of years, Bitcoin does not yet have this pedigree and is hitherto untried and untested in a real financial crisis.
…skim milk masquerades as cream’ When investing in tradable securities, we sit across the table from the financial alchemists of Wall Street and the City of London. Unlike shares in companies, bonds are mostly bought and sold over the counter (OTC) and are not subject to the same scrutiny as the common or preferred stock […]
Like the black rhinoceros, investment counsellors that place the interests of their client above their own are close to extinction. In the last 30 years, the investment industry has morphed from making money for clients to making money from clients. As a result, sensible investors should question what they own and why, and not assume […]
Economist Milton Freidman was right about ‘temporary’ government spending. In 1803, the UK government devised income tax as a temporary measure to pay for the Napoleonic Wars. It’s still here! In 1971, President Nixon removed the physical gold backing of the US dollar. He promised in his speech to the nation that it would be […]
“If you don’t know who you are, the stock market is an expensive place to find out.” These words, spoken in 1723 by Adam Smith, philosopher and economist, are a timely reminder that asset prices can fall much faster than they can rise. Apart from March 2020, many investment advisors have not experienced a severe […]
