Pragmatic Capitalism

Practical Views on Money, Finance & Life

Author Archive

Challenging the Consensus

Herd mentality is one of the strongest and most powerful human instincts. Humans take great comfort from walking the same path as others have walked before them, and nowhere is this more evident than in the field of investments.

Squeaky Bum Time


The 2002-03 season in the English Premier League, which ended with Sir Alex Ferguson winning a seventh Premier League title, developed into a hectic battle between Manchester United and Arsenal. At the height of the race for the title, with only a few weeks left of the season, Sir Alex uttered the now famous words: “It’s getting tickly now – squeaky bum time, I call it.”

Euthanasia of the economy?

US Chairman of the Federal Reserve Ben Bernanke listens to questions as he testifies before a House Budget Committee on Capitol Hill in Washington

By Niels Jensen, Absolute Return Partners ”Crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.” Rudi Dornbusch, Economist In his masterpiece The General Theory of Employment, Interest and Money John Maynard Keynes referred to what he called the ‘euthanasia of the rentier’. Keynes argued… Read More

Heads or Tails?


“Once one starts to think about it, it is hard to think about anything else.”
Robert Lucas, Economist and Nobel Laureate, on economic development in emerging economies.

A Case of Broken BRICs?

Whilst many chose to spend August on the beach, a full-blown crisis developed across emerging markets, and the BRICS in particular. The ‘B’ got into trouble with its currency under severe pressure. So did the ‘I’ and the ‘S’, whilst the ‘R’ and the ‘C’ both experienced loads of bad news on the economic front. Not exactly what you have come to expect from the BRICS.

The Wisdom of Crowds


EMH is a hypothesis. MPT is what practitioners in the investment management industry use to implement the theories behind EMH. AMH is a hypothesis as much as EMH is and tools allowing investors to adopt this new paradigm must be further developed. The process has already begun, though.

In the Long-Run We Are All in Trouble


All I know is that financial markets cannot stay disconnected from economic fundamentals forever so, ultimately, the Tony Dyes of the world will be proven right. Unless they lost their jobs beforehand, that is.

Looking For Bubbles


Recent weeks haven’t offered much fodder for the optimists of this world. Eurozone leaders continue to rely on their central bankers to do the dirty work and the dithering is beginning to have an effect on consumer and business confidence across the world.