Thinking Aloud

When we believe that we have something of interest to say, we jot down posts that we hope might offer a different perspective on an issue or conventional wisdom. We call this Thinking Aloud.

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FOSSIL FUELS AT A TIME OF TRANSITION

Executive Summary: Fossil fuels currently represent 80% of global energy supplies. These fuels are deeply embedded in all aspects of the current energy complex. This energy complex is composed of different facets such as transport, manufacturing, heating, electricity, agriculture. There are no immediately available substitutes for any individual facet of this energy complex, much less […]

September 30, 2022

INVESTING AT AN INFLECTION POINT

There has been a shift in the investment environment over the last few months. Having dominated Value for the best part of a decade until November 2021, Growth has since underperformed Value by 14%. This has been epitomised by the fortunes within market sectors: the two sectors that delivered the best returns in the prior […]

March 30, 2022

LONG-TERM THINKING

At Kennox, we see great strength in the current corporate system, which includes the creation, growth and interaction of an enormous range of companies. Whilst there are unquestionably significant problems, these corporates are an essential part of the market-based ecosystem that has steadily increased living standards for so many across the globe for so long.

November 10, 2021

ESG AND INFLATION

Kennox suggests that there might be other ways to view ESG and inflation than the accepted narrative currently in the markets. Maybe it makes sense to consider the idea that wishful narratives are crashing into the inevitability of hard realities. Perhaps the situation with natural gas in Europe is a good example for ESG. A narrative recently has been that gas has no redeeming features [...]

October 10, 2021

KENNOX BELIEFS

Kennox’s investment style is logical, sensible and powerful, built upon fundamental human behaviours. Psychologists and behavioural economists observe that not-entirely-logical traits and irrational quirks slip regularly into human behaviour. For Kennox, key to note are that people: extrapolate the recent past, don’t like uncertainty,

July 14, 2021

KENNOX THOUGHTS ON ESG

Intractable societal problems are complex, and any solution will involve painful trade-offs with no easy answers. “Ethical” issues such as diversity, climate change, inequality across groups or genders are especially complicated – if simple and easy answers existed, surely the problems would have been solved by now. To make it more complicated, ethics are inherently […]

June 10, 2021

OBJECTIVES, VALUES, AND ADVANTAGES

There are times in every investor’s career when the values that drive their approach are brought into particularly sharp relief. Now, as markets become increasingly distorted, is one of these times. Geoff and I have been managing the Kennox portfolio for coming on 14 years now. We have 100% of our equity investments in our Fund and are pleased to have been joined along the way.

March 24, 2021

WHY SHELL IS AN ESG INVESTMENT

There are times when there are “fat pitch” opportunities available in the market, opportunities arising when the prevailing narrative in the market doesn’t match up to the likely practical outcomes in the real world. The market’s narrative can become beguiled by enticing but ultimately false promises, by misdirected thinking that is likely to be significantly […]

March 17, 2021

VALUATIONS AND LONG TERM RETURNS

2018 saw the passing of a giant in the fund management industry, John Bogle of The Vanguard Group, who was seen as the father of passive investing. He had many interesting insights into the investment industry, one of which was to break down investment returns into constituent parts (back in the June 2013 issue of […]

March 7, 2019

QUALITY & SUSTAINABLE EARNINGS

As Investment Directors at Kennox, we have 100% of our equity wealth in the Kennox Strategic Value Fund. Our objective is to make excellent, risk-adjusted returns for us and our co-investors in the Fund, delivering annualised performance over the long term which is in the high single digits or better (currently 9% net of all […]

March 21, 2018

MARKET DISTORTION

As you might remember from our last speech in 2014, we’re devout pessimists. But it’s getting hard, given the distortions we are seeing in the markets, not to become optimistic. We think that the outlook for value is very good. Before discussing distortions, I will give a brief overview of Kennox value. After all, the […]

March 8, 2018

ENERGY AND GLOBAL DEMAND

Energy, particularly speculation on the future of renewables and electric cars, is a hot topic of conversation at present, being as important to the cocktail party circuit as it is to the safe and smooth functioning of the global economy and our planet. Our society must navigate the turbulent waters between the environmental impact of […]

November 3, 2017

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Kennox Asset Management

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Email: enquiries@kennox.co.uk Telephone: +44 (0) 131 563 5440

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The Company is based in Scotland, UK with the above registered address (Registered Number: SC302037).