Adam Smith, ‘the father of economics’, was a 19th-century economist, philosopher and thinker who said, “A stock doesn’t know you own it.” All investors at some point become painfully aware of this reality. We are all mortal beings with a specific life span; not so the stocks in which we invest. Stocks that have a […]
How we own gold is a function of why we own it. We may buy gold as an ornament, as a speculation or against the depreciating purchasing power of currencies and other assets and as crisis insurance. For the speculator who needs exposure to the gold price, holding gold in an exchange traded fund (ETF) […]
Markets are made of people. As a result, movement of market prices ultimately reflects collective human behaviour, greed and fear, endeavour and ambition. Global stock prices continue to rise, and many are now at historic highs. This asset price inflation has attracted many speculators who see an opportunity to make money quickly, but for a […]
In the short term the market is a voting machine in the long run a weighing machine. Benjamin Graham The Intelligent Investor Macro-Economic Share prices in Global equities commodities and Bitcoin continued to rise over the quarter albeit with increased volatility. Investor speculation as to whether asset prices have been inflated into a bubble which […]
“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 […]
As I write, greed and euphoria have finally developed into the gambling mentality now permeating the stock markets in the US. History shows us that this will end in tears. The secret of success in long-term investing, as distinct from making speculative short-term bets, is avoiding serious permanent loss. The saddest chapters in the long […]
A battle of ideas is raging amongst investors and speculators, fought with equal conviction about the merits and defects of Bitcoin and cryptocurrencies. According to the founder of the Celsius Network, ‘people giving venture capital to crypto believe it will save humanity from itself’. It is easy to confuse cryptocurrency with a state-owned digital currency. […]
Successful investing is not a study of certainty, but a value judgement based on probable outcomes. The US electorate has voted and the result is contested, but what this means for the US and global economy is still uncertain. A US election is important because the US accounts for 25% of global gross domestic product […]
The inconvenient truth confronting investors is that economic outcomes over the short term are extremely difficult to evaluate with any certainty
Markets are a reflection of human behaviour and endeavour. In financial markets and in an economy, nothing happens in a vacuum. Eleven years of central banks’ money expansion while maintaining artificially low interest rates has pushed up asset prices, creating asset price inflation and moral hazard. Public and corporate debtors are taking on more debt, […]
