Author: Arminius

31 October 2018

Investors will remember that we have been nagging them about the coming correction. Now that it’s here, the big question is how bad will it be.
History is a good guide because, as Warren Buffett has pointed out, Mr Market keeps making the same mistakes, swinging from over-optimism to extreme pessimism and back again. The main driver of the US share market since the GFC has been the technology sector, headed by stocks such as Facebook, Apple, Amazon, Netflix, and Google (aka Alphabet)… [read more]

25 October 2018

2019 is the Year of the Pig. In the Chinese zodiac, the pig is regarded as peaceful and generous, but the Chinese government already has a serious problem with pigs. In addition to fighting a trade war and trying to deflate a credit bubble, it now has to deal with an outbreak of African Swine Fever.

Cases of African Swine Fever (‘ASF’) were reported in China’s north-east in early August, and authorities responded by disinfecting farms, imposing quarantines, culling over 200,000 infected pigs, and restricting long-distance transport of all pigs. Their measures have been unsuccessful… [read more]

10 October 2018

For the last six months we have been warning our investors that the end was nigh for the US bull market which has appreciated by a colossal +423% for the S&P500 TR index from 6 March 2009 to 21 September 2018. Arminius Capital ALPS fund investors have benefitted from this since the fund’s inception in 2014, until we became very concerned at the end of the first quarter 2018 and began to materially add to (increasingly expensive) hedges. The recent rises in US 10 year bond yields and falls in global equities have signalled that the long bull market is over… [read more]

15 September 2018

15 September 2008 was the day that Lehman Brothers went bust. Lehman had long been one of the pillars of the US financial system, and management had been hoping for some sort of bail-out, but the US government wasn’t going to play. The Lehman insolvency sent the GFC into full panic mode.

The GFC had been gathering pace since June 2007, when the US market for residential mortgage securities began to seize up as buyers became more and more suspicious of the value of these securities at a time when US house prices were falling… [read more]

27 July 2018

President Trump’s latest tweets and interviews clearly indicate that he intends to go ahead with his trade wars. This is bad news for China, and even worse news for China’s regional suppliers like Australia, Japan, Malaysia, Singapore, South Korea, Taiwan, and Vietnam. But The Donald’s trade war ambitions have also expanded to include Canada, Mexico, and most European countries… [read more]

18 June 2018

It is difficult to begin solving a problem until you admit that the problem exists. One of the reasons that the GFC was so severe in the US was that US regulators had spent the previous decade or two ignoring the danger signs while they proclaimed the virtues of the free market and asserted that bankers’ self-interest was the best assurance that banks would not misbehave… [read more]

08 May 2018

The first principle of the ALPS Fund’s strategy is based on the fact that staying invested in equity markets over the long term produces very good returns – an average of 8.8% pa in the US since 1871, and slightly better in Australia over a shorter period. This is why, most of the time, the Fund owns shares in the Australian, US, and European markets… [read more]

Apr 18, 18

Trade wars are not like ordinary wars. They don’t start with a formal declaration of war, or with an informal one like the bombing of Pearl Harbor. They get under way slowly, with tit-for-tat threats which escalate step by step… [read more]

2 Mar, 18

There are very few stocks that most fund managers would buy and hold for 10 years – with the notable exception of everyone’s darling, Berkshire Hathaway, which famously never ever pays a dividend (with no complaints from the shareholders!)… [read more]

As we investors watch famous names in retailing crumble under the relentless assault of Amazon, we start to wonder, “Which sector will be the next to be disrupted?” Then we think, “Will the companies in my share portfolio survive all these changes?”… [read more]