Argonautica

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

7 posts found for 2014

‘The Tartan Venezuela’

At the heart of the “Yes” to independence campaign has been Scotland's apparent desire to turn itself into a kind of tartan Venezuela: endless platitudes about aspiring to equality but more likely bringing misery; spending plans that would squander vast oil reserves on unproductive welfare; intolerance of opposing views often combined with threats to confiscate private property; apparent ambivalence over hugely disruptive economic policies including defaulting on its sovereign debt obligations should…

‘The ECB: now Europe’s least dysfunctional institution’

Before Mario Draghi became its President, the ECB was widely regarded as just another dysfunctional European institution: overly focused on an illusory inflation demon, indifferent to anaemic economic growth in the Eurozone and in any case too impotent in terms of unconventional policy tools at its disposal. Whilst debate in the US and the UK has moved to the timing of exit from unconventional monetary policy, the recent announcement that the ECB would embark on an unsterilized programme of private…

‘The Father (of debt), the Son (of liabilities) and the Holy Spirit: O Pai (de divida), o Filho (de passivo) e do Espirito Santo’

Banco Espirito Santo (BES) has historically been controlled by the eponymous and historically influential Portuguese family through a leveraged and complex shareholding structure of holding companies. The company with direct ownership of BES (aka “the bank”) equity, the Espirito Financial Group (ESFG - Portugal) currently owns 20% (down from 27% a few months ago).1 However, stripping out minority shareholdings in the holding companies, the underlying economic ownership of the Espirito family in the…

‘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…

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