Argonautica

Professional investors can review published thought leadership and market updates from the Argonaut Investment Team.

2 posts found for June 2014

‘Risk and roulette’

Risk is often always viewed as undesirable. But without risk, active fund management can never generate the necessary superior performance to justify its existence: no traditional long only manager could beat the market; no absolute return manager could beat cash. Diversifying away all risk is therefore never appropriate for an active fund manager: without risk, we are condemned to perpetual mediocrity. To the outside world, the stock market is often seen as incorporating the kind of binary risk…

‘A dislocation between earnings and price’

April and May witnessed a significant rotation within the European markets, away from cyclicals and into defensives. We argued in our blog last month (“Market volatility and the proverbial gift horse”, April 2014) that we believed there was nothing fundamental behind this and indeed it offered investors a prime opportunity to buy into those areas of the market which are continuing to see earnings upgrades, specifically the domestic cyclical names whose fortunes are closely tied to that of Europe’s…