As seen in the February edition of Master Investor Magazine. Past mistakes guide future pain The rampant decline in commodity prices that started two years ago seems to have finally put an end to the epic boom most commodities experienced during the early part of this century. Almost no commodity has escaped the furious price…
The European Union is considering the possibility of banning €500 banknotes in a move to fight corruption, fraud, and even terrorism. The high value of these banknotes makes them “too useful a vehicle of corruption and other illegal activity”, anti-fraud authorities claim. We should force people to execute transactions using electronic money and through plastic…
The correlation between oil prices and equity prices has always been shrouded in mysticism, with no one being able to come up with a clear cut explanation for the relationship between the two. Many studies point to a strong relationship between the returns on oil and equities; many others point to the absence of any…
Risk and volatility are increasing rapidly, as investors reassess whether more easing is really a good thing or just the confirmation of a global central banking failure. US markets are way overvalued due to the trillions the FED injected into the market over so many years. At a time industrial production and employment data are…
One thing central banks fail to acknowledge is that their medicines are a kind of chemotherapy that, while attempting to eradicate a problem, often end up damaging everything else at the same time. QE in particular is one of those unconventional treatments that should always be used with parsimony because of its extreme side effects.…
When I woke up today I was shocked by the news that the BOJ had cut its benchmark rate to -0.1% overnight. At a time when the FED is fighting to normalise its policy and the ECB is entertaining investors to delay further QE, the BOJ decision comes as a major blow and a huge…
As seen in the January edition of Master Investor Magazine. We’re now at the beginning of the year: a time when investors, analysts, journalists, and politicians make a series of predictions for the year to come. Most of them will prove wrong, as the many interactions between all the variables involved make it impossible for…
The ECB has kept its key rates and asset purchasing programme unchanged while Mario Draghi promised investors there’s more to come in the near future. A dovish Draghi is keeping investors entertained while buying him some time to convince the other committee members to extend the current asset purchase programme. If he doesn’t deliver there…
The latest data published by Oxfam show a worrying increase in income inequality during just the last few years. Many believe this to be the consequence of the free market, and in response raise arguments in favour of policy intervention. I myself believe public intervention to be the cause, not the solution, as the global…
There are many sayings in the financial markets regarding calendar effects. Some say “sell in May and go away”; others say “as goes January, so goes the rest of the year”. Both sayings are based on persistent performance anomalies that were uncovered by traders and confirmed by researchers. Today I’m going to test another calendar…
