Rental Increases and the Merseyside Derby…

One might have thought after the collapse of the Celtic Tiger bubble we would have figured out the role of housing in our society. It doesn’t appear to be the case.

As measured by the consumer price index, Irish inflation fell by -0.1% in the year to November 2016. At the same time, walk up Grafton Street any night and you’ll get a sense of just how bad the homelessness crisis is.

Yet against this backdrop the political establishment is rushing through legislation to ensure landlords cap annual rent increases at 4%. In turn, aggrieved landlords are frontloading increases before legislation is passed and their lobby group are making threats to government. What a system!!

I keep coming back to the same three questions I raised in my article in March 2015 (see link), which called for a clear long term policy on residential real estate:

  • Why, if we apply such importance to the family home, is speculation in residential real estate permitted?
  • How much property should one individual be allowed to accumulate?
  • Is a house a home or an investment?

The housing crisis won’t be figured out any time soon, but we’ll know tonight who wins the battle of Merseyside. Interestingly, the foundation of Liverpool FC only came about because John Houlding, the landlord of the Anfield road ground, wanted to raise rents on his tenant, Everton Football Club.

The Everton board refused to bow to Houlding’s demands and in 1892 the club moved across Stanley Park to their new ground, Goodison Park. With no team to play at his Anfield Stadium, Houlding created a new club, Everton Athletic. The Football League would not accept his original name and we became Liverpool FC!

This Derby Days video sums up what it means to fans, particularly those based in Liverpool, “It’s More than 90 Minutes, It’s Your Life”.

2-1 win for Liverpool tonight!

Another New Year; Life Is About Taking Risks

Another year almost down. Where did it go you ask? It is hard to believe we are now heading into 2017. The turn of the year always makes me more introspective.

As I look forward to 2017, below are two pieces of wisdom that I find inspiring. The first is a poem entitled “Risk” by Janet Rand. The second is a quote from Dostoevsky.

Working with trustees on investment strategy, risk is a concept that features regularly. Ultimately, to earn a return, particularly with cash rates marginally negative, members must take the risk of potential losses in the short term.

Of course, taking risks is not limited to your choice of investment strategy. In my mind there are much bigger risks to be taken in terms of the decisions that shape the life one leads, the people you share it with, the career you pursue and the experiences you seek.

Life is all about taking risks, this poem by Janet Rand says it all:

RISK

To laugh is to risk appearing the fool,

To weep is to risk being called sentimental.

To reach out to another is to risk involvement.

To expose feelings is to risk showing your true self.

To place your ideas and your dreams before the crowd is to risk being called naive.

To love is to risk not being loved in return,

To live is to risk dying,

To hope is to risk despair,

To try is to risk failure

 But risks must be taken, because the greatest risk in life is to risk nothing.

The person who risks nothing, does nothing, has nothing, is nothing, and becomes nothing.

He may avoid suffering and sorrow, but he simply cannot learn, feel, change, grow or love.

Chained by his certitude, he is a slave; he has forfeited his freedom.

Only the person who risks is truly free.

The other piece I will share with you is a quote I came across in a book I am reading on existentialism, “Existentialism – From Dostoevsky to Sartre”.

Dostoevsky, the Russian philosopher, wrote in his “Notes from the Underground”:

“However stupid the “direct” practical man may be, the thought will occur to him that the road almost always does lead somewhere, and that the destination it leads to is less important than the process of making it.”

Following that mind-set can help to take risks!

I’m off to San Diego Friday and then Tulum, Mexico, for two weeks immersion in the Spanish language, with 3 hours of classes every day.

Hasta luego mis amigos!

Vincent

Reflecting on my 10 weeks learning about Radio

today-fm

I recently completed a 10 week Diploma Course in Radio Production, run by the Today FM School of Radio, in partnership with the Independent College Dublin. The course is designed to give students a flavour of how the radio industry works, teaching research and production skills, digital recording and editing, along with the fundamentals behind presenting various types of radio shows.

Why a radio course?

After being on radio a few times I wanted to learn more about how everything works. For me, this was a great opportunity to hear from the top people in Today FM, Ireland’s largest commercial independent radio station. Podcasts are something I’ve also contemplated making, so I was keen to learn the editing and production skills needed. Read More

“20 Hours Learning Challenge” Revisited

Surfer Wave

At the end of August I wrote a blog – The “20 Hours” Learning Challenge – inspired by a TedxTalk from Josh Kaufman, entitled “The first 20 Hours – How to learn anything”.  (YouTube link)

Kaufman’s theory is that when starting something new, with just “20 hours of focused deliberate practice”, one can go ‘from being grossly incompetent at knowing it to being reasonably good’.

By precommitting to the 20 hours Kaufman argues that we can overcome what he calls the “initial frustration barrier”, that feeling of being stupid that causes people to quit too early before they reap the rewards. To prove his theory, Kaufman wows the audience with his ukulele playing skills, the final completion of his 20 hours learning the ukulele.

So, impressed by Kaufman’s presentation, I decided to put his theory to the test with a more difficult instrument to learn, the acoustic guitar. Read More

US Fed Chatter: “Lower for longer” to “faster and further”

Janet Yellen

The minutes from the US Federal Reserve’s monetary policy meeting at the start of November were judged to be supportive of a possible rate hike in December. Federal funds futures contracts are now fully pricing in a 25bps increase, which would see the Fed lift their key interest rate to a range between 0.50% – 0.75%. Treasury bond yields moved higher following the release.

Fed officials have plenty to ponder ahead of their next meeting, to be held on the 13th and 14th of December. As ever, the Fed are likely to take their lead from financial markets so it would be a big surprise if they decided not to raise rates. Of more importance will be the Fed’s outlook for interest rates over the next year, remarks on fiscal policy and US dollar strength.

At the September meeting, the number of rate hikes expected in 2017 was reduced from three to two, according to the median forecast of FOMC participants. The ‘lower for longer’ theme was extrapolated, yields moved lower and the price of gold moved higher. However, since the election of Donald Trump as the next US President the narrative has changed, yields have risen sharply and the price of gold has slumped.

One CNBC commentator called it a shift from ‘lower for longer’ to ‘further and faster’, postulating that if a Republican Congress passes Trump’s fiscal policies the Fed may be forced to pursue additional rate hikes at a faster pace. We have also seen the US dollar strengthen considerably on the prospect of such an outcome. However, the stronger US dollar could bring its own challenges for the US external sector, which has so far gone ignored.

Trump rally defies market consensus

irrational

Market Recap

There is no doubt that last week will be a week to remember for the world, the election of Donald Trump as President. For all the fear around such a result in the lead up to voting day, it turned out to be a stellar week for the major global equity indices. The Emerging markets were more challenged as the US dollar moved sharply higher. Perceived safe-have assets such as gold and government bonds sold off amidst the Trump optimism.

It was amazing to witness how quickly sentiment changed towards the Trump victory, from a sharp sell-off to outsized gains for stocks. The reality is that the collective in financial markets care less about what impact Trump’s policies will have on people and the environment, but more about which companies stand to make the most money out of his policies. Read More

Thoughts on the Donald Trump Victory

Donald Trump

You are hired. The next President of the United States of America, Donald Trump.

While in many ways it is not surprising, the decision has sent shockwaves across the world. The initial panic in markets has subsided but the world is still reeling from the news and will do so for some time.

As I wrote over the weekend, whether you like him or not, Trump’s popularity in itself is reason enough for those in power to wake up and recognise the inequality that has been the by-product of globalisation.

He has appealed to the many Americans that feel left behind by the system. And clearly there is a lot. This is perhaps the biggest message that can be taken from the Trump victory. Read More

US Presidential Election: Initial Thoughts

San Diego

I wasn’t intending to write anything on the US Presidential Election because it is just a pantomime at this stage. An old celebrity billionaire (depending on who is counting) and another Clinton. Is that how bad things have become? Read More

US Presidential Election: The Nuclear Option

the_american_dream_by_jackcomstock-d5la9be (1)

Donald Trump bad. Hilary Clinton good.

That is the general narrative on most discussions around the impact of the 2016 US Presidential election on the global economy, the US economy and the Irish economy.

The Economist Magazine has become the latest media publication to back Hilary Clinton, demonising Donald Trump. In their piece in this week’s issue, entitled “America’s best hope: Why we would cast our hypothetical vote for Hillary Clinton”, there is certainly no sitting on the fence.

While they make the case for why Hilary deserves to be elected on her own merits, their sentiment towards Donald Trump is summed up by one statement: “We would sooner have endorsed Richard Nixon—even had we known how he would later come to grief.”

As for the financial markets, we have also recently had to listen to how gains in the polls for Donald Trump have rattled markets. It is all short term noise. Read More

Einstein, Mourinho & Active Management

Einstein

Albert Einstein said the eighth wonder of the world was compounding but it seems Jose Mourinho must have taken to reading Einstein’s work during his time off after his Chelsea sacking. The Manchester United manager continues to sarcastically refer to football pundits as ‘Einsteins’ and on Monday night he claimed ‘Liverpool are not the last wonder of the world’.

Now, the man who ran down the pitch to celebrate with fans, goaded Liverpool fans at Anfield after crushing their title hopes, stuck his finger in an opposing manager’s eye and berated a club doctor, has the audacity to call out Chelsea manager Antonio Conte for motivating his fans. The self-proclaimed special one’ should read this quote from Einstein:

“If A is a success in life, then A equals X plus Y plus Z. Work is X; Y is play; and Z is keeping your mouth shut.” Read More