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The Triumph of Experience over Hope

[ This article was written on 19th January - Posting for record ] Lyndsell Train is value focus asset manager which focuses on protecting the real value of client’s capital for long period of time. They believe “Survivability” is the key criteria for any Investment Practice. 1 In its latest newsletter “The Triumph of Experience Over Hope “ 2 portfolio manager James Bullock builds a case for very low churn equity portfolio having companies which has survived more than 100 years. Here are few highlights of his portfolio: · Portfolio consists of 24 stocks. · Out of 24 companies in portfolio 16 companies are in existence more than 100 years. · Fund has sold only 4 companies since last 11 years. In an insightful article James Bullock, Portfolio Manager- Lyndsell Train addresses most important question before Investor: Is there any advantage to be gained investing in a compan...

MACRO NOTES Last fortnight was interesting and all eyes are now on US for various reasons. Quoting The Economists “US is undergoing three economic experiments at the same time: Huge fiscal stimulus (at around 14% of pre-Covid GDP) Monetary policy which is far more tolerant to inflation [In new framework FED is targeting average inflation of 2%] Households holding huge savings level and question is whether they will spend? In the light of above facts, it pays to be attentive to what is happening in US on both Monetary and Fiscal front: Fiscal President Joe Biden has taken huge gamble by going in for big fiscal stimulus of $ 1.9 Trn upfront. Alternate approach suggested was nibble with small stimulus and wait for impact of Vaccine + recovery. Post that go for a larger stimulus, if required. Composition of stimulus is as below: Covid Containment and Aid to States and increased federal spending: $ 750 Bn= Unemployment Benefits: Cont...

US Market : Who is right - Equity or Bond ?

[ 9th Feb 2023 ] US economy is poised at interesting cross-roads. While inflation is coming down growth data is holding up. FED has been less hawkish on one day and more than less hawkish on another. And perhaps most of the economist are at best can be described as “Cautiously Pessimistic”. As they say if US goes into recession this year it will be most pre-announced recession in recent times. With this pretext how various factors are stacking up: Fundamental Data US data holding strong, deterioration in cyclical data. Europe and China data picking up. Most Imbalanced Labor market condition. Still Quarterly County Survey holding strong for labor market. There are 54 lacs employees who have left labor market. In line with inflation wage growth has soften a bit to 4.4%. ISM Non-Manufacturing surprise on upside. Number jumped from 43 to 60. Number greater than 50 is expansion in activity. Monetary Cycle Fed may pause b...

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