This post is inspired by reading George Soros’s paper on reflexivity. I’ve taken the basic idea but then applied it to investing in a different way to Soros. The result is that I end up writing about a something a bit different. The implications are fairly intuitive and I think crucial to understanding why markets behave the way they do. This post is more abstract conjecture than practical advice, but hopefully I’ve managed to come up with something that manages to be thought-provoking but accessible. Continue reading
Everything seems to be looking up in the markets at the moment, at least it does from my particular vantage point. My portfolio has risen pretty relentlessly so far this year and is almost back at its all time highs, something I didn’t expect to happen nearly so quickly back at Christmas time. Many of the other investors I follow on Twitter have also been posting high-teen YTD returns or better (well done if that’s you). As I mentioned in my recent portfolio review, I think the macro picture currently seems fairly benign for investors in high quality equities. What could go wrong I wonder? Continue reading
The last three months have seen a fairly spectacular bounce in many stock markets across the world. After the US markets had their worst year since 2008, they’ve now had the best first quarter since 1998. The S&P 500 is up almost 15% so far this year. The UK markets are not doing quite so well but have still seen a pretty decent bounce. My portfolio has had a fairly satisfying bounce along with everything else, benefiting significantly from its exposure to US Tech but being held back a bit by ‘air pockets’ in some of its smaller AIM investments. Continue reading
This post was prompted by an article I stumbled across, describing a recent presentation by Aswath Damodaran. I found a version of this presentation here, though this version may well be a bit out of date. In it, he argues that there is clear evidence that acquisitions tend to destroy value for the shareholders of the acquiring business. I’ve heard this plenty of times before but haven’t thought much about the consequences for my own investments. On reflection this seems negligent. Base rates matter. I should really have a better idea of what the evidence actually says.