No Monkey Business: a no nonsense clearing in the personal finance jungle

Thursday, July 24th

Calling the bear market: how did we do?

We are not economists but we need to rely to some extent on economic insights in order to advise families on finance or manage their portfolios. Sometimes, economics are not necessary and all the information is in asset valuations. Not this time: seeing this bear market coming was all about economics. So how did we do? Pretty well, actually. Because we share our views with blog readers, our record can be scrutinised. In this post, I have linked some of Stuart’s past blog items to examine our record, starting with our investment strategy as we spelled it out in October 2006.
Joe Clark on 07.24.08 @ 09:46 AM GMT [">more..]

Saturday, July 12th

A leader takes his leave

The passing of Sir John Templeton will give many professional and knowledgable private investors pause, as he was truly one of the giants on whose shoulders they have stood. He was humble enough to make the same attribution of his success to giants before him.

To those of us with the task in the '70s and '80s of persuading conservative pension-fund trustees in North America to invest internationally, John Templeton was one of the best proof statements of the rewards that come from a global sense of opportunism. And for those who resisted the developing truism that country bets were more important than company bets, he was a handy renegade. As an early exponent of country allocation in portfolio construction, I found his contrary statements in no sense inconvenient. His performance was 'explained' (after the event) by country allocation even if the size of the country bets was solely explained (before the event) by the number of cheap securities he found available. Either approach could have led to the investment he famously made in Japan in the '50s. But very few foreign investors made it.
Stuart Fowler on 07.12.08 @ 11:27 AM GMT [">link]

Saturday, July 5th

Updating real house prices

The Nationwide house price index through June shows a decline of about 7% from the peak last autumn. This is being reported as a significant correction but viewed from the perspective of the long history of house prices relative to general inflation, it is only another small step in the market's four-year defiance of gravity since deflated house prices first peaked relative to their long term trend. Without the oxygen of credit, prices have held up remarkably well but market psychology has changed far more than prices yet indicate. The bear market is about to begin in earnest.

We update in this post our series for the trend of real house prices since 1957, based on the Nationwide data for the 'average house' and the Retail Price Index. Earlier posts (search: "real house prices") explained the significance of the data series as a proxy for fundamental value and as a predictor of future holding-period returns. Real returns matter to occupiers if they are substituting for their own financial asset holdings and they matter if they are borrowing to finance property purchases. They can either rent property or rent money. The relative cost of each will determine whether they build or destroy wealth in real terms. High real property prices in a world in which capital is getting expensive spell real wealth destruction.
Stuart Fowler on 07.05.08 @ 07:50 PM GMT [">more..]

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nomonkeybusiness.org

a no-nonsense clearing in
the personal finance jungle

By whom

For whom

Business connections

Calling the bear market: how did we do?

A leader takes his leave

Updating real house prices

Topical Index:

External Links:

nomonkeybusiness.org

a no-nonsense clearing in the personal finance jungle

By whom

For whom

Business connections

Calling the bear market: how did we do?

A leader takes his leave

Updating real house prices

Topical Index:

External Links:

a no-nonsense clearing in
the personal finance jungle