Articles and client letters from the St Andrews Partners team.
These articles are provided for information only and do not constitute and should not be construed as, investment advice or a recommendation to transact in any company, stock or sector mentioned.
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We believe that the activity of funds management is not separate from the business of running a fund manager – our highly risk aware approach to looking after clients’ money necessitates a similar approach to running our business.
Liquidity is a characteristic of a market for an asset whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset’s price. By definition, liquidity is a confidence trick. In normal conditions a particular asset may be highly liquid with many transactions taking place per day. However, in extreme circumstances, if every owner of an asset is seeking to sell, there may be no matching buyer.
Stewardship is the primary quality we look for in the companies we choose to invest our clients’ funds. We are only interested in backing management teams who run their companies with a long term ‘owner-manager’ mind-set.
Stewardship is the primary quality we look for in the companies in which we choose to invest our clients’ funds. We are only interested in backing management teams who run their companies with a long-term ‘owner-manager’ mind-set.
One of our favourite laws in economics is Goodhart’s Law, which states that as soon as a metric becomes a widely used measure, it ceases to be a truthful yardstick. Good examples are GDP or Earnings Per Share. Politicians and CEOs, respectively, are acutely aware that their jobs depend on the smooth growth of these proxies and thus inevitably seek to game these measures.
What do Argentina, Turkey and Italy have in common? Judged by their public debt as a percentage of GDP, not very much: the figures are 56%, 28% and 144% respectively. Yet in each case, the credibility of these countries’ promises, in the form of their currencies and outstanding bond obligations, was called into question this year.