Its Not Harry

Comment and opinion for retail investors in the UK

Education

YAP – bad news, or not?

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You will likely have noticed that the news on inflation is less positive than wished for by central banks and markets have modified their assumptions on when interest rates will start coming down. This has been reflected with direct impact for those renewing fixed rate mortgage contracts as at least in the UK, rates have actually gone up slightly.

So, is that just simply bad news?

It is certainly not good news for bonds and the FT headline today that the climate for fixed income investing is ‘unsettling’ is a good way of describing the situation.

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YAP – there’s gold in them thar central banks!

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You may have noticed a really significant increase in the price of gold bullion in recent months.

This is because something that we have known about for some time – continuous topping up of gold reserves by the Chinese central bank – is now seen as part of a more global pattern. With such large buyers active in the market, the price is bound to be well supported.

The reason for this anticipated expansion of central bank buying? Probably 2 main reasons, I think.

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Deep Dive – April 2024

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To kick off this new series of articles, I am going to express some opinions that are not rooted in traditional book learning or any specific academic research or publications, but my own observations of what actually happens in equity markets, taken over the last 4 decades and mixed in with my personal rather eclectic reading about human behaviour in the context of decision making – not specifically related to financial decisions.

You might call this ‘behavioural insights in equity market valuations’ but I suspect that is rather too grandiose!

NotHarry says….

The main points

I will be exploring 4 less obvious ways in which market valuations are created and sustained (or not):

  • Possible ‘invisible’ supply side variations and/or sudden excess demand

  • The ‘the majority view is safest’ syndrome

  • The Government interference problem

  • The ice break risk

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The Magnificent 7 ride again – but how many sequels can we expect?

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The table which will download if you click the link below demonstrates well how shares in the mega sized tech firms (branded the Magnificent 7 after possible acronyms got to be absurd and named in the downloaded document) have generated most of the main US market returns in 2023, and for those of us with funds that have a specific thematic bias, some excellent results too.

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