Posts Tagged ‘debt’

Equities – A Rarefied ‘APP’mosphere

It’s getting hot up here! Equities are toast. We are ringing the bell on the global equity markets on the first day of TWTR: NYSE listing.    

 

We love the Internet, Social Media, Gaming, and software applications designed to run ‘ideas’ on smartphones and tablets.  We love their creativity and productivity but we don’t love the public valuations of their stocks. They have entered into the ‘APP’mosphere.  

 

What has driven these stocks higher – the power law of internet adoption rates, corporate debt growth, and credit availability are the first factors that spring to mind.  

 

Markets are where buyers and sellers simultaneously agree on price but disagree on value. There is subjective value and then there is objective value. Subjectively we object to these values.   This is an excerpt for the coming HindeSight Investor Letter November 2013 Equities – A Rarefied ‘APP’mosphere.

 

Continue Reading

Is it Safe . . . . ?

Anyone who has seen the 1976 film Marathon Man will no doubt recall the cringe-inducing scene where a sadistic Nazi dentist (played by Laurence Olivier) tortures the protagonist (Dustin Hoffman) by drilling into his teeth without anaesthetic. Throughout the ordeal, Olivier repeatedly asks, “Is it safe?” Not knowing what “it” refers to, Hoffman is unable to come up with an answer to avert the torture.
 
I couldn’t help thinking of this scene in the movie and the constant question, “Is it safe?”, without relating it to the current investment climate. It is over 5 years since the eye of the last financial crisis, with stock markets almost back to their 2007 highs, while gold struggled. It must be safe, right?

Continue Reading