A Different Perspective
Asking the Right Questions
The Pablo Escobar Tour in Medellin, Colombia
Pablo Escobar industrialised the cocaine business and put the city of Medellin in Colombia on the map, for all the wrong reasons. However, once one of the world’s most dangerous cities, it was named “Innovative City of the Year” in 2013, in a competition organised by the Urban Land Institute and sponsored by City and the Wall Street Journal. The city has moved on from the violence of the Pablo Escobar years, a past it is keen to leave behind, as are most Colombians. For them, talking about Pablo Escobar and Colombia in the one breath is cliché. Read More
Colombia, not too different from Ireland
While I have only been loosely following markets over the last three weeks, after all in the short term it is all just noise, my three weeks in Colombia have provided me with new perspectives and insights that I look forward to sharing on my blog over the coming weeks.
Many people will have little interest in the economic fortunes of Colombia. However, anyone invested in the MSCI Emerging Markets Index, of which almost all portfolios now have an allocation, will be invested in Colombian equities. Reflecting on this dynamic, it raises questions about the passive nature of capital – whereby small shareholders have little say in how companies are run – that forms the basis of the economic model we all operate within. Read More
Be careful where you invest your love…
Valentine’s Day, a day for celebrating love, albeit slightly contrived and infiltrated by the reach of commercialisation that permeates all walks of life. They say love is the most powerful emotion of all, therefore it is no surprise that the word is used so much in the financial markets. Turn on CNBC and you’ll hear the talking heads waxing lyrical about the ‘stocks they love’.
Ultimately, the stock market is simply a reflection of the collective opinions of market participants, often driven by emotion, at a point in time. Hence, when the share price of a company is flying high and assigned eye popping valuations we hear about why ‘the market loves these stocks’. Read More
US Fed Policy: A Much More ‘Gradual’ Path
Global equity markets sold off sharply last week, as weak economic data outweighed the recent positivity generated by the prospect of more easing from the Bank of Japan (BOJ) and the European Central Bank (ECB).
Much of the focus was on the US, as weaker than expected reports on manufacturing and services raised concerns about the trajectory of the US economy. Comments from Bill Dudley, President of the New York Federal Reserve, on the ‘tightening of financial conditions since December’ have added to speculation that the US Federal Reserve may be forced to abandon planned rate hikes this year. Read More
Weekly Market Update: February 1st 2016
Market Recap
Global equity markets enjoyed another positive week, buoyed by further support from the major Central Banks, this time the Bank of Japan (BOJ) with the introduction of negative interest rates. As well, speculation of a possible production cut by OPEC pushed oil prices sharply higher and boosted energy related shares. Brent crude oil surged +8.20% last week, to $34.30 per barrel. Read More
“Declaring war on China’s currency? Ha Ha”….
Last week was another challenging week for mainland Chinese shares, with the Shanghai Composite Index of mainland shares falling -6.14%, bringing the decline in January to -22.65%. The index is now down -47.01% from the bubble high reached in June 2015.
Efforts by the Chinese authorities to revive the market have been fruitless, with all the gains since the end of August eroded over the last five weeks. The stock market is just one of the indicators which reflects the increased risk of a hard landing in China. Read More
Weekly Market Update: January 25th 2016
Market Recap
After a difficult start to the week, most of the major equity indices ended the week in positive territory. As expected, ‘Super Mario’ Draghi came to the rescue for markets with reassuring comments that fuelled hope of more aggressive monetary policy from the European Central Bank. The mere mention that additional measures will be considered at their meeting in March was enough to drive equity markets sharply higher on Thursday and Friday. This is a familiar story. Read More
Shaping the world from the heights of Davos
The World Economic Forum took place last week in Davos, Europe’s highest altitude town. As ever the event carried a grandiose theme, with this year being the year of “Mastering the Fourth Industrial Revolution”. For those who missed the event, they have shared the 36 best quotes from Davos 2016. There might be no inflation in Western Europe, but there is plenty at the World Economic Forum, sharing 22 in 2014, 27 in 2015 and this year bringing us 36 quotes!
They should stick to quality over quantity, with musician Will.I.Am making the list with “Let’s put our optimism googles on”. Still, Christine Lagarde, Managing Director of the IMF gave him a run for his money with her quote “We’ve heard a lot about the Internet of Things – I think we need an Internet of Women”. They were not all bad though. My personal favourite is a thought provoking quote from the CEO of PayPal Inc., Dan Schulman, who said “The biggest impediment to a company’s future success is its past success”. Ponder that one….
Interview Series: 11 Questions for the Minister of Finance
Ireland was the fastest growing economy in Europe in 2015, ranked by percentage change in Gross Domestic Product (GDP), the economic indicator which captures the value of all goods and services in an economy. While there has also been a major improvement across a range of other economic indicators, significant challenges and risks remain.
The ECB’s record low interest rates have brought reprieve for many individuals and businesses mired in debt, as well as the heavily indebted State. The decline in the Euro exchange rate has boosted exports, and as an open ended economy we will have felt more than a ripple from the improvement in the economies of our main trading partners such as the UK and US. Therefore, we are heavily reliant on external factors.
At the same time, domestically, we are yet to emerge from the legacy of the last crisis, the implications still being felt across all elements of public policy. Earlier in the year, I put 11 questions to the Minister of Finance, response pending, which I believe touch on the main challenges and risks facing the Irish economy. Read More
Choose your future now…
Choose your future. Choose a dream. Choose adventure. Choose new interests. Choose the freedom to travel, choose lying on a beach drinking a cold beer, white sand, turquoise waters, and soothing ocean waves. Choose sitting on your deck on balmy nights looking up at the stars without a worry in the world. Choose your retirement goals and imagining your life without the early morning alarm and soul destroying traffic. Choose a pension contribution rate, starting early, and regular reviews. Choose your risk profile. Choose an investment fund. Choose the right fund, choose active or passive, asset classes, diversification, return objectives and risk. Choose lifestyling. Choose living out your years in style, spending your hard earned money over leaving it behind, and reflecting with no regrets. Choose saving for your dream retirement and making that dream come through. Choose your retirement now…
(The fear inducing headlines about falling markets can cause one to forget the big picture when it comes to long term planning. Based on the epic monologue from Trainspotting, with permission provided by the legendary author Irvine Welsh, my rewording might provide some perspective)
