The majority of our time is spent trying to uncover mis-pricings amongst high quality companies.
That said we are aware that there is an economic backdrop that we are investing against. With many daily commentators on the economy, interest and exchange rates and markets, we are not inclined to waste our efforts in joining such debates unless we feel we have a genuinely different perspective to offer.
We liken understanding the macro-economic backdrop to using the wing mirrors in a car when driving i.e. they are important to glance at occasionally to get a feel for the conditions outside the car (or portfolio) but they should not be the main focus of attention. A few examples of our past work in this area are below but we are mindful of Keynes pertinent reflection that “The purpose of astrology is to make economics look respectable”
“Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match. You may live, but you’re still an idiot.”
– Jim Grant