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.

hello world!

WHAT IS RISK?

Risk is losing money, nothing else. There are other measures and analyses of risk but Value at Risk, CAPM-derived betas and equity risk premiums, tracking errors and other such measures are of no help when investing using a low-turnover, concentrated, long-term value style. Only thinking of risk to one’s capital money makes sense. Equities are […]

November 4, 2010

CRUNCH ANALYSIS

We are in a tricky spot right now in the global economy. This is not one person’s, one group of people’s or one institution’s fault. It is the fault of all of us. Enough of us believed that the good times would last forever, that prices would continue to go up because they had, that […]

October 4, 2010

THE ROLE OF MACRO

We are often asked what is more important, the bottom up or the top down, the micro or the macro. Without question, we are bottom-up investors. We feel that the best approach to protecting and growing capital is to find companies with an identifiable business franchise available at valuations which afford a margin for error. […]

August 4, 2010

TIME TO GO TO CASH? THINK AGAIN

Flashback to June 2009: After a slight falter, markets seem to be continuing their inexorable rise upwards. However, the undeniably optimistic trend in asset prices seems opposed to the flow of news. Commentators are comparing those guiding the economy with tightrope artists teetering over a vertiginous drop [1], everyone is discussing the precarious timing of […]

April 4, 2010

PORTFOLIO MANAGEMENT

Portfolio management, conceptually, is about risk and return and about correlation and diversification. It is taught in academia as Modern Portfolio Theory; Markowitz’s efficient frontier, optimal portfolios and the like. While we firmly agree with the concepts of risk and diversification, it seems to us that this theory is too often put into practice using […]

March 31, 2010

DIVIDENDS VS BUY BACKS

There are two economic reasons to own share: capital gains and dividends. The beauty of dividends is that they reward you with a steady income while you wait for unpredictable capital gains. According to Standard & Poors, when dividend payments were at their peak in 2007, they accounted for nearly 7% of US personal income. […]

March 4, 2010

BUBBLES - THEN AND NOW

Bubbles have been a recurring phenomenon throughout modern economic history. “Modern” in this instance refers to the period after the industrial revolution, and it is unsurprising that there were no economy-wide speculative bubbles prior to the 17th century. The two basic prerequisites for a bubble are a fair proportion of the population owning enough wealth […]

February 1, 2010

A FEW CONCRETE ACTIONS TO ENCOURAGE LONG-TERM THINKING AND BEHAVIOUR

Recent stories of rises in tariffs on food have caught our attention, as several countries try to protect their citizens’ interests. While we generally applaud governments protecting their citizens’ interests (that’s what they’re supposed to do after all), this type of action is dangerous and short-sighted. Firstly, the law of unintended consequences says that this […]

May 4, 2008

WHY HOLD GOLD

There are at least three classic reasons for holding gold as part of a portfolio: 1) As protection from a weakening dollar 2) As an inflation hedge 3) For diversification as it is uncorrelated to other investments. Although in many ways these are different sides of the same (gold) coin, we hold gold for all […]

December 4, 2007

CENTRAL BANKNG STRATEGY WATCH

We mentioned to a friend that our favourite game at present is “Central Bank Strategy Watch”. It’s pretty simple: you try to figure out what each central bank should do, what you think they will do, who will go first, which one is your favourite. And how about some of the exciting sub-games: Interest Rate […]

September 4, 2007

« Previous 1 2 3

Kennox Asset Management

33 Melville Street, Edinburgh, EH3 7JF, UK

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

Home About us Kennox Value The Fund

Insights Contact Regulatory Information

Authorised and regulated by the Financial Conduct Authority (FRN: 475658)
The Company is based in Scotland, UK with the above registered address (Registered Number: SC302037).