Covid notepad 2 : Observations and opinions

Government v covid 19: I Suppose you are the leader  of your country and your chief medical officer came to you with one of the following two statements: A. “We have detected the rampant spread of a new virus that will kill 10% of those who contract the disease.” B. “We have detected the rampant […]

The real G7

Germany, the UK, Japan, France, Italy, Canada and the United States make up the G7 Leading Economic nations.  The membership criterion is, loosely, that these countries produce the most output by virtue of their population’s size and productivity.  Donald Trump, the US President, has proposed inviting a broader range of countries to join the G7 […]

Covid 19 notepad: Observations and opinions

1. Pandemic preparedness It is curious how the general media seems to think that every nation should have sufficient medical resources available to deal with the strains of a pandemic. Investing in five times the average daily demand for medical resources in case a pandemic happens is both suboptimal and ludicrous. The US spends 18% […]

Panic v numerical discipline in predicting Covid19’s market impact

“Investment ideas can spread like epidemics.” Robert Shiller in his Nobel Lecture “Speculative Asset Markets” 2013 Bob Shiller’s Nobel winning contribution was the observation that asset markets generally are too volatile relative to theoretical methods for pricing securities.  The panicked reaction to Coronavirus 2019 (Covid19) seems no exception. I have regularly been asked what Covid19’s […]

An activist in the VC woodpile signals MPT is on its way

Paul Singer, the billionaire activist investor, just announced that his Elliot Investment Fund has taken a 20% stake in Masayoshi Son’s Softbank Ventures.  Activist investors make a living out of forcing efficiencies on inefficiently run companies. Softbank is a legend in VC-land, yet it trades at a 50% discount to NAV.  Masayoshi Son is a […]

Memoirs of a SARSa

As the WuHanFlu pandemic rapidly takes grip, it is worth recounting the SARS crisis of 2002… The first I heard about SARS was when a taxi driver picked me up with his car door windows completely open. I congratulated him on his appreciation of the climate and rejection of air conditioning which tends to be […]

Blackrock abandons its passive positivism in favour of active value-judgment

Social reformers, religious zealots, the politically correct, the politically active, tree huggers, the elitists and a host of  other individuals with non-libertarian attitudes have difficulty accepting cold, hard, facts. Rather than acknowledging society as it is and trying to explain why it is that way, these people want to change it.  Positivism, on the other […]

ARAMCO’s direct listing arithmetic

ARAMCO, the Saudi Arabian oil company, issued stock at a  USD1.7 trillion valuation last week  and promptly traded up 18% to top USD2trillion. This was in line with the Saudi government’s initial valuation expectations. This result was achieved essentially by direct listing. I say this since the cap raise was a miniscule 1.5% of market […]

An FDV threeway: Swinging in Saudi Arabia…plus Our UK Election Special…plus the latest release from DJ Dr Fish

Swinging in Saudi Arabia ARAMCO officially listed yesterday.  The Saudi owned company is the world’s largest oil producer, world’s largest company … the world’s largest many things.  It has played a political role, a diplomatic role and a world economic role for many years as the ‘Swing Producer’ in the oil markets.  Swing producers have […]

Crypto just joined the establishment and sunk the Fed

Many traders and portfolio managers began their careers on the Cash desk. This is a place where you can learn the markets without getting into too much trouble. Cash is variously defined as fixed income securities with maturities ranging from 91 days for the most secure portfolios out to 397 days for portfolios with slightly […]