Market Thinking

making sense of the narrative

Browsing:

Month: February 2021

Concentration Risk.

As discussed, the sell off in Bond Markets is also clearing out the trading funds and day traders’ stocks, as they all cut leverage. The short term traders may yet be buyers-on -dips, but we suspect that they have packed Read more…


Regime Change?

In the latest Friday Market Thinking, we concluded that the biggest medium term risk to markets was likely to be bonds, given their historic tendency to damage other asset classes as they deleverage. The risk models behind our Model Portfolios, Read more…


Themes and Memes

We like to look at markets as being driven by the behaviour of three different groups – the short term speculators, the medium term asset allocators and the longer term investors. Sometimes the three groups offset or partially offset one Read more…


“An undertaking of great advantage…”

The economist Michael Hudson has a useful expression contrasting the Economic Models of the West with those of emerging Asia as Industrial Capitalism (Asia) versus Financial Capitalism (the West), where the latter is in effect a return to the rentier Read more…


Animal Spirits

Sentiment is an important driver of short term markets and with Chinese money being an increasingly significant factor in markets generally, so an understanding of Chinese psychology and sentiment becomes genuinely relevant. Today is the start of Chinese New Year, Read more…


Investment SAGEs

Experts advising Pension Funds have become like SAGE advising the UK government. Using historic computer based models based around some simple prior relationships, they make predictions on which they base their policy advice. The trustees, like ministers, are often non Read more…


A New Role for the BBC

As the second in our series on Build Britain back Better (the first was on Reform of the House of Lords and improving Regional Government, see here) we look at Reforming the BBC. Specifically the opportunity to use the BBC Read more…


Groundhog Day

So Punxsutawney Phil saw his own shadow but then went back into lockdown, which means (to no-one’s surprise) another six weeks of lockdown and mask wearing. Frankly he is as informed as any of the other government ‘experts’ on this. Read more…


February Market Thinking

Following the powerful bounce from the March 2020 lows and the strength of the Santa Claus rallies at the end of the year, it was perhaps not too surprising to see some backing-off from the major equity indices towards the Read more…