Commentary

The Road to Equality

As if the Coronavirus outbreak wasn’t enough of a problem for society to deal with, shortly afterwards, two American police officers ended the lives of two American civilians. Why that will affect financial markets for a long time to come you can read here.

Commentary

Five Lessons from History (5/5)

Wounds heal but scars last. That’s an old lesson from history and will also be the case as far as COVID-19 is concerned. We already know from empirical evidence in China that consumers are in no rush to come back on the streets of the big cities, and why would it be any different elsewhere?

Commentary

Five Lessons from History (4/5)

Why is it that a fire on the other side of the planet attracts far more attention than a new innovation about to be rolled out, and how can investors take advantage of that? This is a question more relevant than ever, given the impact of the current Covid-19 outbreak.

Commentary

The Economic Cost of Social Distancing

The economic costs associated with the coronavirus case outbreak are nothing short of staggering. Expect Q2 to collapse which is not good for equities and not good for bonds either.

Commentary

Five Lessons from History (2/5)

Lesson #2: Reversion to the mean occurs because people persuasive enough to make something grow don’t have the kind of personalities that allow them to stop before pushing too far.

Commentary

Five Lessons from History

Financial hardship often drive people to adopt views that were previously unthinkable. It is a very powerful behavioural pattern and has significant implications for financial markets. In this month’s Absolute Return Letter, we take a closer look at what it really means.

Commentary

The Known Unknowns of 2020

Trump's decision to take out the Islamic Republic's most celebrated military leader, Qassem Soleimani, was a timely reminder that we face many problems. An armed conflict between the US and Iran is clearly one of them but far from the only one. Here is a list of the ones we worry mostly about, going into 2020.

Commentary

A Future Embedded in the Present

We have reached a stage in the cycle where you need to think out of the box in order to deliver respectable returns. Investing like most of us have done in the great bull market will not deliver returns anywhere near the levels we have enjoyed over the past 35-40 years. This month’s Absolute Return Letter offers a solution.

Commentary

How to Invest in a Low Growth World (Part 2 of 2)

The evidence is overwhelming that automation has positively impacted total factor productivity (TFP) for years, i.e. GDP growth continues to benefit from the digital revolution despite the fact GDP growth is rather pedestrian these years.

Commentary

How to Invest in a Low Growth World (Part 1 of 2)

A classic approach to economic theory suggests low GDP growth in the years to come. Why and what to do about it is what this month’s Absolute Return Letter is about. Next month, we’ll look at the impact of advanced robotics – why a rapidly ageing workforce might not be the problem it is often portrayed as. Could robots simply replace humans in the work process?

Commentary

Is Ageing Inflationary? Really?

For years, economists have disagreed whether ageing is inflationary or dis-inflationary. Ever since IMF published a controversial paper in 2015, the debate has raged, but I have finally concluded that ageing is most definitely dis-inflationary (and perhaps even outright deflationary), and here is why.

Commentary

Energy Misconceptions

Investors are not always told the full story before they invest. In this case, we are constantly told that electric vehicles offer the way forward, but evidence is mounting that they are actually polluting more than petrol or diesel cars. The penny just needs to drop as far as our political leadership is concerned.

Commentary

The Cost of Rising Populism

25% of Europeans vote for a populist now, and rising populism has a devastating impact on GDP growth, as more and more capital is misallocated which is an economic term for capital being deployed unproductively. Rising populism is obviously not the only reason why more and more capital is misallocated, but it is nevertheless an important reason.

Commentary

The New ARP+ Service

New rules do not allow us to provide research free of charge any longer. Consequently, our business model is changing.

Commentary

Addicted to Oil?

Apart from the 2014-15 supply shock, oil prices have proven to be extremely elastic more recently with only modest changes to either supply or demand having an outsized impact on oil prices. We look into the implications of that and find that oil prices could possibly rise a fair bit further this year even if they are already up 40% year-to-date.