Welcome to the very first edition of my fortnightly newsletter! Thanks for taking the time to read, I’ll make sure it is time well spent.
Markets are off to a choppy start to the year as they weigh the next interest rate cycle. Overshoot is to be expected. But look at Natural Gas.
Let’s get to this fortnight’s update:
3 things I’m reading:
A staggering 40% of global shipping is fossil fuels being transported. Yeah, I struggled to believe that too to start with. But, the source is legit and a little bit of independent research gets you to ballpark same figure. Needless to say a lot of things would be a lot better with a renewable grid. Shipping by itself would be the 6th largest country emitter, plus all sorts of other bad externalities.
Done with 2022 forecasts yet? No me neither… Visual Capitalist has neatly summarised a load of 2022 forecasts so you don’t have to. tl;dr a rocky start for China , year of the worker , geo-political risks , inflation easing , central bank hiking , rising global inequality , crypto regulation , onshoring … we discussed this + all the other forecasts we could find on the podcast this week.
Trillions (book). FT journo Robin Wigglesworth unravels the surprisingly riveting history of the humble index tracking fund. Tracking things from beginnings in the 1970s at Wells Fargo and a then-unknown spin off from Wellington called Vanguard. Through to BGI, BlackRock and , well , you know the rest. Today about a quarter of professionally managed money is index funds and its been a boon to individual investors - keeping many billions of dollars in investors’ hands rather than find managers. The author presents a positive story - particularly of Jack Bogle (who forewent a large fortune by establishing Vanguard as a mutually owned firm). But there’s also a good nod to the potential downsides of the dominance of index funds.
Two things I’m listening to -
Animal Spirits: why the stock market rally could last a lot longer (a useful counterpoint at a time of year when risks are often to the fore). My favourite podcast, a lively and ranging discussion as always, refreshingly candid and jargon free.
Michael Mauboisson on Masters in Business. Stock market valuation can seem like a dark art, until Michael Mauboisson lays it out so elegantly and simply. He covers: why you shouldn’t jump to using PE ratios , why intangibles matter so much in valuation today, what many stockpickers have missed over recent years and the essence of his theory of expectations investing. Essential listening for anyone involved in markets
One thing to brighten your day -
You have to check out the ridiculously talented Miss Excel on TikTok . She’s got all your excel training needs covered . People love to mock TikTok, but just look at the skill and creativity
Bonus froth -
Anya Hindmarsh is into recycled handbags & sustainable fashion, plus rentable fashion: clothes as an asset class? It’s an £8bn market cap sector now thanks to IPOs and sales and the c$300bn of value sitting in all our wardrobes doing nothing. Side note - fashion as an industry accounts for 10% of global GHG emissions, and I personally like the idea of slicing carbon emissions by industry not country, as shows more where the responsibility lies. Also fashion as a multiplier: it has an outside impact on culture and behaviour
Thought for the week
Busy is covering up for a deeper problem. Busy is insecurity….
Bragging about being busy is silly. Busyness produces less results, not more. Meetings are the worst form of productivity. “