Market Thinking

making sense of the narrative

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Category: Monday Morning Musings

IRL v WFH

Short term Uncertainty and Medium Term Risks While we continue to puzzle over official pronouncements on the pandemic, markets are nevertheless thinking about growth, inflation and asset allocation. One of the issues challenging asset allocators in particular at the moment Read more…


Whiskey and Car Keys

The following is the text of an article submitted to Australian Financial Review – albeit with a title added by us. We do this on a regular basis, but since it is behind a paywall many of our readers can Read more…


Arch – Egos? We like to look for nominative determinism where we can find it, so to see that the over-leveraged US Hedge Fund that was forced to aggressively de-leverage on Friday was called ArchEgos was too good to miss. Read more…


Buying which dip?

We like to think of the market moving in a variety of ‘herds’, with the opportunities for the biggest herd, the long term investor, being presented by the behaviours of the other two, the Asset Allocators and the short term Read more…


The Great Bond Reset?

The post below is the outline text sent for an article in the Australian Financial Review (AFR) looking at the triple threat faced by bond markets. As our recent posts have suggested, we see Bonds as the biggest short and 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…


“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…


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…


Cognitive Dissonance

As US and other equity markets continue to hit new highs, we see increasing examples of Cognitive Dissonance emerging, notably in the response to the US Election. Historically this can lead to a sudden switch in the ‘narrative’ which can Read more…


Non Stationarity, False Certainty and China

In an increasingly uncertain world, people crave reassurance. Unfortunately those appearing to offer certainty and ‘science’ are in many cases fooling themselves along with their customers. Covid has revealed many problems with the systems that we use, not least the Read more…