Value investing will survive Fortnite – and other tech disruptors Kyle ‘Bugha’ Giersdorf is 16, lives with his family in Pottsgrove, Pennsylvania and last weekend, by virtue of his extraordinary proficiency at a computer game, he became a millionaire. At the end of the first-ever Fortnite World Cup, which took place at New York’s Arthur Ashe Stadium, Kyle emerged victorious from a field of 100 [...]
How a World Cup run might turn £1 into £65,000 – the power of investment compounding The World Cup is underway, so what better way to explain the miracle effects of compounding than via a football analogy? We recently attended a meeting of company pension fund trustees where the chairman felt the need to clarify one observation with the line: “And, of course, because of compounding, a 10% increase in performance [...]
How ‘blockchain’ compares with ‘dotcom’ in the company name game One of the first things you learn as a value investor is to dig below the surface of any potential investment – analysing a business’s balance sheet and other data to ensure you really understand its underlying value, its financial strength and how it works. In short, a relentless focus on the numbers means we [...]
Finally, all UK banks pass the stress tests: is now the time to invest? December 8, 2017 Imagine you emerged blinking from your bunker in the wake of this: interest rates up to 4 per cent the value of the pound down more than a quarter unemployment up almost 10 per cent residential property prices down by a third commercial real estate prices down by two-fifths world and UK GDP down 2.4 [...]
How Richard Thaler’s theories can help investors November 8, 2017 The thinking of professor Richard Thaler, an expert in behavioural finance, can help you become a better investor, so we were delighted to see him awarded a Nobel Prize in economic sciences. Firstly, his views should matter to you as a citizen. He developed the theory of “nudge”, where rules, structures or incentives are subtly [...]
How do interest rates affect stockmarkets? October 25, 2017 The UK economy grew 0.4% in the third quarter of 2017, increasing the likelihood of an interest rate rise in November – the first in a decade. With stocks near record highs we look how interest rates affect the stock market. Ask yourself this – how much would someone have to give you in a [...]
Why the robot apocalypse won’t come tomorrow June 16, 2017 Read any media article on artificial intelligence or ‘AI’ these days and you are likely to come away with the impression it won’t be so very long before your life is being run by the Matrix and your boss is a marginally more benign version of the Terminator. Apparently, however, there are still a couple [...]
Life expectancy remains as uncertain as any other part of our future May 22, 2017 Life expectancies are constantly being revised upwards as extrapolation take the most recent data into account. Kevin Murphy, author on The Value Perspective blog, highlights how dangerous making predictions from such a short amount of data can be. Along with taxes, death is famously supposed to be one of life’s two certainties – and yet [...]
Seatbelt laws created a new danger – and a lesson for investors April 18, 2017 Australia was first to enact seatbelt legislation in 1970, creating some unexpected results. It underlines an important point for investors about risk, according to value investing blogger Kevin Murphy. No matter what anyone may tell you or try to do, attempts to reduce risk in any system – investment or otherwise – only succeed in [...]
How inflation helps ‘value investing’ March 17, 2017 ‘Value investing’ has been resurgent since last summer, as explained here. Inflation can help this type of investing. Kevin Murphy, an author on The Value Perspective blog, explains why. At the very end of last year, in our post Three important investment lessons to take from 2016, we noted in passing that President Trump’s intention to [...]
