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Global Matters Weekly – A tail of two services

In the world of investments, boutique investment houses often play second fiddle to larger asset gatherers. One of the key advantages of boutique firms is their ability to remain nimble, allowing them to respond swiftly to dynamic market conditions, potentially generating enhanced returns.

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Viewpoint – August 2023

Equity markets struggled for direction in August, falling sharply initially before a partial recovery reduced the losses in the MSCI World index to -2.4%. Bond markets continued the pattern since the mini banking crisis in March with another negative month, the JPMorgan Global Government Bond index -1.3%.

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Global Matters Weekly – The Investment Odyssey: Avoiding the Sirens of Behavioural Bias

“The Odyssey” by Homer is an ancient Greek epic poem that tells the tale of the Greek hero Odysseus and his challenging journey back home after the Trojan War. It introduces the Sirens, mystical beings who entice sailors to their doom through captivating songs that draw them closer to their island, ultimately causing shipwrecks on the rocky shores. Odysseus’ response to the Sirens’ threat offers a valuable lesson for investors. He sought to protect his crew by instructing them to plug their ears with beeswax, preventing them from hearing the Sirens’ calls. However, he was curious about what the Sirens were saying, so he had his crew tie him to the mast and not release him until they had passed the Sirens’ island.

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Global Matters Weekly – Macro matters

As a reminder, macro is only ever an input into our investment process, and it is subordinate to bottom-up company (and government) analysis. Previously, I’ve called this a ‘macro aware approach’ to differentiate it from a macro driven process, and I think that’s a useful way to characterise what we do.

The scope of the macro work we do is twofold: firstly, we aim to formulate a view on key macroeconomic variables, specifically growth, inflation, interest rates and geopolitics (although not strictly a macroeconomic variable…). At times these key macroeconomic variables inform the bottomup work the team does. Secondly, we reflect on market dynamics and whether any high-quality indicators suggest we should be bullish or bearish in the short term.

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Global Matters Weekly – Don’t trust the numbers

Mathematics never lies, but our ability to interpret mathematical concepts accurately and honestly is at times limited. Blame our faulty, imperfect, imprecise, biased human brains! Numbers can say a lot and nothing, or sometimes can be well-trained puppets that speak just like the ventriloquist. Numbers should never be trusted blindly: challenge them, poke them with a stick and make sure you fully understand them before drawing any conclusion.

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