This is a great read on how to ask good questions and why that is so important.
“Nobel-prize winner, physicist Arno Penzias, when asked what accounted for his success, replied,“I went for the jugular question.”
Still practicing his questioning discipline today, Penzias recently commented at a Fast Company Conference, “Change starts with the individual. So the first thing I do each morning is ask myself, ‘Why do I strongly believe what I believe?’ Constantly examine your own assumptions.”
Interesting post from FT Alphaville about construction.
It discusses a recent IMF note which shows that the construction sector is often a great canary in the coal mine of economic activity.
“An additional percentage point of value-added or employment growth in the construction sector during a boom raises the probability of the boom being bad—followed by subpar economic performance or a systemic financial crisis—by 2 and 5 percentage points, respectively.“
“Strikingly, in our sample, long-lasting booms that featured rapid construction growth never ended well.”
Interesting point that because inflation doesn’t account for housing costs properly the central banks will always be behind the curve.
Salmon, as it is a fresh high value discretionary product, could be an interesting lead indicator?
“Right now there is no trade with China of salmon, although you can find the air freight for the salmon. It doesn’t help because you don’t have the clients. And the price is also very high because of the cost of air freights…There people do not go out and eat….95% of the salmon consumption in China is through restaurants and the likes. So 120,000 tonnes of that market is out.” Mowi Conference Call via thetranscript.
The concept is how one should let go of logic in order to generate brilliant ideas.
An interesting exercise is to think how these ideas can help in investing.
“Being logical makes you predictable, and your competitors will know what you’re going to do before you do. This is because using logic will very likely land you in the same place as everyone else, and sharing a market space with competitors this way creates a race to the bottom. Instead, figure out the logic model of your competitor, find where their use of it is too narrow and exploit this.“
“The U.K. remains – the cork is still in the bottle. It didn’t go off last Friday [Election day]. Money is still sitting on the sidelines. I think it may start to come, but I don’t think we’d be calling that as like the last Friday doesn’t – is only the beginning, not the end. And there are other challenges in the U.K. market, so the U.K. is probably the area across the industry which is the most difficult at the moment.” JanusHenderson CFO
Rightmove report out for February on UK and London house prices.
“London’s recovery continues with new-year momentum pushing up prices and sales numbers, and finally encouraging more sellers to come to market … Better market encourages new sellers, with the 1.6% increase in the number of newly marketed properties being the first rise compared to the prior year for 16 months.”
Americans’ optimism about their personal finances has climbed to levels not seen in more than 16 years, with 69% now saying they expect to be financially better off “at this time next year.”
We have previously written about the risks building form the rising popularity of bond ETFs.
This article argues the opposite – more ETFs = more trading in bonds = liquidity.
We take issue with these arguments. An inspection of two bond etf prices shows you that they have mostly marched upwards (e.g. LQD, VCIT).
As ETFs go up they create more units and are willing buyers in bond markets. This of course creates liquidity.
The main issue will be on the downside – if something goes wrong, ETFs, en masse as they follow pre-set rules, will sell and there won’t be anyone on the other side.
