Xpression

  I came across fund Fundsmith Equity Fund [ https://www.fundsmith.co.uk/] from one of our esteemed Investor Family. I am thankful for sharing high quality investor. I spend some time to understand their Investment framework, understanding global practices, how they approach investment, transparency and philosophy, etc.   It was so refreshing to watch Terry Smith explaining fund’s investors: Global Update Investment Framework Impact of Macro Factor change like inflation on portfolio companies Talking portfolio companies in detail Governance Succession Planning at fund Performance attribution of fund Mistakes Sharing video link of AGM which is mentioned and hope you will enjoy watching it. https://www.youtube.com/watch?v=IojZCeUjhRg Have a nice Weekend!!! [ ps. I later came to know that Terry Smith is known as Warren Buffet of UK J ]

  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 Interest Rate and MBS market structure One of the underappreciated properties of Complex System is: They are characterized with long period of statis, marked by sudden catastrophic failure. Perhaps from this property only market has got sayings: “In market nothing happens in years and decades happens in weeks”.  Our memory of March 2020 is still fresh I guess. There was a sharp movement of US 10 Year yield in last 3-4 months, US 10 year closed at 1.625% on Friday. Just to put in perspective 10 Year UST touched 0.53% in July and it was at 0.91% in December. Last week was one of the worst weeks in long time. It appears that current move of reflation trade (Expecting Inflation and Normalising of economy) is overextended and yields may cool in coming months. However something else happening in the US Bond market which is super interesting. As mentioned by Harley Basseman (The Convexity Maven) in his interview with Michel Green (Logica Capital Advisor), that entire market struct...