SA Bond Market – antiquated or efficient?

[Update: for some incomprehensible reason the embedded video clips below only work on YouTube. Click the image for a link to the YouTube page] Andrew Canter (of Future Growth) makes some strong statements about the “phone and dealer” approach to the South African bond market. When one of the arguments against Andrew’s preferred centralised, electronic …

The beginning of the bitcoin end

Ah Bitcoins: In addition to being a disastrous idea, experiencing recent crashes and fraud, the EFF has now decided that they “…don’t fully understand the complex legal issues involved with creating a new currency system.” and didn’t want to be construed as endorsing the system. In other news, despite assurances to the contrary, I wouldn’t …

So many more reasons Bitcoins will fail

Most of the comments on this Slashdot article about fraud and crashes with Bitcoin are insightful. Some are funny too. Most telling for me is that one of the primary Bitcoin exchanges Mt Gox started life as “Magic The Gathering Online Exchange” – an exchange to trade collectable cards for a fantasy game. Should I …

This is not (only) why bitcoins are a bad idea

The USD value of bitcoins decreased by 30% in one day on Friday. This isn’t the only problem with bitcoins, but it is a natural result of not having a central bank / government behind the currency saying “we are committing to this currency and requiring it to be accepted as legal tender”. There are …

Doesn’t have two Bitcoins to rub together

Prediction:  Bitcoins will be irrelevant by 2013 and will never emerge from a very small niche market. In fact, they are already irrelevant today. This is what happens when open source supporters, crypto experts and privacy nuts think an understanding of C++ and maths equates to knowledge of economics and monetary systems. Oh, and add …

The Alpha and Inflation of Commodities

Commodity prices rise and the world screams hyperinflation. Elsewhere, alternative investment managers espouse the virtues of commodities as an asset class that generates “alpha” returns (i.e. returns not related to the overall direction of markets). The thing is, it’s hard to have it both ways.  The link between unexpected/expected inflation and equity prices in the …

Your ERP estimate is still too high

I recently had a conversation with a colleague who had been told that “Credit Suisse recommended an Equity Risk Premium of 7%”.  I’m curious to know whether they truly view that as an appropriate ERP.  If your ERP is 7%, it’s still too high. The authors of Triumph of the Optimists have joined forces with …