It’s no secret that ‘value’ based investment strategies have generally underperformed absolute market returns throughout the current bull-market, with this underperformance being particularly acute over the past three years. Importantly however, the underperformance of value as a style has not been driven by a failure of value investing to deliver on what it sets out…
Sadly, investors lost one of their greatest advocates last week, Jack Bogle, the founder of Vanguard and a pioneer of the index investing movement passed way. Jack’s legacy will be that he created a practical real-world application for a well-established academic idea. The efficient market hypothesis holds that the current price of an asset should…
We know that humans have been infatuated with gambling for as long as we have records. Some of the earliest games of chance were forms of a dice game that used the squarish knucklebone of hoofed animals. These bones have been found at archaeological digs all over the world, showing that we used this precursor…
My first boss and mentor always knew when it was going to rain. He would stand up from his desk, stretch an aching leg, and declare that a thunderstorm was coming. He could “feel it in his bones.” Today the received wisdom in the market, especially from investors with a little grey hair and barometric…
We’re so used to hearing Australia referred to as the Lucky Country that it often comes as a surprise to learn that Donald Horne, the author who coined the phrase in his 1964 book of the same name, meant it as a criticism. The opening sentence of his final chapter gives the book its name….
Pick up a newspaper today and it is hard to find many reasons to be cheery. North Korea and ISIS take turns in frightening us for our lives. Brexit and Trump take turns in frightening us for our livelihoods. Most financial commentators are fixated on predicting how soon it will be until the next bear…
In December 1996, the two words, irrational exuberance, spoken by Alan Greenspan, then Chairman of the US Federal Reserve, became forever burned into financial market psyche. US equity markets had risen by 126% over the five preceding years, stretching equity market valuations in the process. As Robert Shiller, an economics professor at Yale University describes,…
The surprise election of Donald Trump electrified financial markets and pushed the Dow above 20,000 for the first time. The prospect of the Republican Party controlling all three branches of the US government, combined with Donald Trump’s fiery pledges to cut corporate tax rates and embark on large-scale infrastructure spending programmes, has driven equity markets,…
Given the theatrics that is current US politics, it’s hard to recall a time when there was more anger and frustration towards America’s political and economic institutions than there is today. However, if we cast our minds back to the 1970s, we encounter a time when energy shortages and oil prices were crippling many developed…
[Editor’s note: Miles Staude works in London and voted to ‘remain’, and considers the Brexit result “a very sad turn of events”. He received many requests for his reaction and wrote this update exclusively for Cuffelinks late during this week. In an earlier note, he wrote optimistically: “It is important to know however that the…
