Argonautica

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

12 posts found for 2015

‘Christmas Quiz 2015’

Our final blog this year is our annual Christmas Quiz – twelve questions to take your mind off the daily market gyrations as we close out the year. We hope you enjoy the quiz and from all at Argonaut we wish you a merry Christmas and Happy New Year. (The answers can be found at the end) 1. UK brick inventories are at levels not seen since the 1980’s. With bricks being the cladding of choice for house construction in the UK, this has meant double-digit price increases for bricks in each of the last…

‘My 7-Year Itch’

Figure 1: Argonaut European Alpha London billboard advertisement 2009 Back in 2009, if you drove out of London on the A4 toward Heathrow, just past Earl’s Court on the Cromwell Road, Argonaut’s one and only attempt at billboard advertising (Figure 1: “Argonaut European Alpha billboard advertisement 2009”) just may have caught your eye. Featuring a folksy, Buffett-like axiom that “once in a decade investment opportunities don’t come around every year,” the advert was an enthusiastic and dangerous…

‘Oil Price Expectations and a House of Cards’

At the beginning of this year the median oil price1 being used by analysts was $80 and $85 for 2015 and 2016 respectively.2 Currently they are using $55 and $58 – a significant 30% reduction in the most important modelling assumption (resulting unsurprisingly in wholesale negative earnings revisions).2 However, notwithstanding these significant reductions in earnings estimates, many of the underlying oil stocks (some E&P’s and most Integrated’s) have remained resilient. We think this is because most…

‘Like Soviet Russia in 1959, has China already peaked?’

Our recent visit to China highlighted significant challenges for its economy: although it is an economic model based around low cost manufacturing, China continues to lose competitiveness by pegging its currency to the ever stronger US dollar; its economy is not sufficiently capitalist for its banking system to recognise bad loans and for non-productive capacity to be shut down; infrastructure build continues to be the main government policy tool for stimulus even though the multiplier effect on…

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