Book Review: This Time is Different

It’s chock-full of analysis, numbers, tables and charts showing how as much as things change, the scope for financial crises changes very little. The comparison of Developed and Emerging Markets is particularly interesting in that the differences, while they do exist, are far smaller than stereotypical views. Emerging Markets do tend to have more ongoing sovereign defaults, but the frequency of banking crises is little different. Weirdly, some aspects of Emerging Market crises (such as employment impacts) are less than average for the Developed World.

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 […]

Fixed Interest is a viable asset class

I heard someone talking on Classic Business tonight. Pity I didn’t catch his name so I can avoid his advice in future. He was saying that he doesn’t see the point in investing in debt instruments.  He explained that the return is low and the risk high since if the company gets into trouble, you’ll […]

Pension funds don’t have enough junk

Junk Bonds are debt instruments issued by corporates that have relatively low credit ratings.  They pay interest at high rates as a result. Typically viewed as risky investments, the junk bonds boom of the 80s showed that there is more to junk than just a risky investment. Locally, our pension funds and other retirement savings […]