Damien Klassen


The wonderful world of broker conflicts

A reminder today from Reuters on the perils of being a research analyst at a brokerage firm. The guts of the story: JP Morgan equity strategists downgrade Indonesian stocks to underweight The Indonesian finance ministry takes offence and stops using JP Morgan as a primary dealer for its government bonds JP Morgan upgrades Indonesian stocks


Iranian oil: back to pre-sanction levels

Another oil report from Oxford Energy, this time looking at Iranian oil and noting: Iran is broadly back to pre-sanction oil production levels. There is the potential for expansion, but that is years away as none of the agreements with European oil companies have progressed very far. There is LNG potential, but that is also


Asset Allocation and the Trump border tax

Here’s some more on border taxes from the FT, following up on my rundown yesterday on Trump’s effect on taxes. The FT are invoking JP Morgan (JPM) to show which countries and stock markets are most exposed: JPM then go on to draw some conclusions based on ETF flows: It is of course almost certain that


Evaluating Trump’s corporate tax scattershot

There are a number of elements to Trump’s tax plan. Most of it involves cutting taxes on the richest and hoping that “trickle down” will sort everything out. I don’t think there will be a happy ending to that story. However, the tax plan is more complicated than that, especially at the corporate level –


Lazy thinking at the Economist

The Economist mounts a defense of Chinese capex today. They start with a study from last year: Western leaders often shake their heads in disbelief at the sums China spends on its huge projects. And some analysts question how much of it has been wisely spent. In a widely circulated study published last autumn, Atif


More debt for less work

From JP this week: Similar to one of our long-term investment trends – although the use of retired workers only (ignoring kids which were a much larger proportion in the 1960s) does make the graph look more dramatic than it might otherwise be.


One more Trump coal threat for Australia

I don’t think the US exporting thermal coal to Asia is likely. But it is one more Trump risk for Australian coal that I was reminded of when I saw the latest EIA coal charts:   Note – this post is about thermal coal (to run power plants) – coking coal economics are different. The


Markets have priced in rainbows but no rain

There is a lot of sunshine and rainbows in economic stats recently: Morgan Stanley’s leading trade indicator: Consumer confidence is generally up in the US:     And in Europe:     With US construction still strong:   The dark clouds? Not many. Rising interest rates and a rising US dollar choking off any recovery


For richer or poorer

Yesterday it was all about the car that your investment manager drives, today it is who their parents were: Research by Dr Oleg Chuprinin, from the University of NSW, and Denis Sosyura, from the University of Michigan, shows that investment managers who grew up in poor families made two percentage points higher returns each year,


Compensating for something?

Picking an investment manager is hard. Not only is the difference between luck and skill hard to distinguish between, but you also have to worry about changes in the investment manager’s circumstances over time. Maybe he (it is usually a “him”…) worked hard in early years, but becoming rich and splitting time between his new beach


Coal – not dead yet, the body is still twitching

I’m a big fan of Oxford Energy, they produce well-researched energy analysis. Unfortunately, Oxford tends to be detail focused, not investment focused, and so there is usually a lot to wade through to tease out the effect on energy markets. Before Christmas they published a looong piece on South East Asian coal – the main


US is not alone in loosening fiscal policy

From the Goldman via the WSJ: There were more developed countries that loosened rather than tightened in 2016. On its own that statistic doesn’t tell us that much (Liechtenstein takes the same amount of graph space as the US on the above chart), but it is a useful reminder that the change in conditions is close


Speech impediments and predicting the unpredictable

My favourite Economist section, The Technology Quarterly recently came out with a focus on voice recognition. The key reason for the focus is that Microsoft Switchboard reached a 5.9% error rate – which is the same error rate as a human transcriber and considerably better than the average offshore call centre operator I’ll bet… There are


Coming to a city near you

As part of rolling out a fund, we are going to start a series of MB seminars around the country, and we are looking for input as to the best location.   The rough format will be a few hours talking investment themes and strategies on a Mon/Tue/Wed night. Myself, David & Leith will be


Ambrose Evans-Pritchard: Credit crunch is coming

Ambrose Evans-Pritchard is back in the Fairfax press and the UK Telegraph talking up the prospect of a 2017 crunch: Trump’s reflation rally will short-circuit. Rising borrowing costs will blow fuses across the world before fiscal stimulus arrives, if it arrives. By the end of 2017 it will be clear that little has changed. Powerful


Playing the Trump card

Last week I ran through the big long-term (20-40 year) economic trends (click here for the full post) that investors should be aware of, noting that a couple of these trends (women in the workforce, the ratio of workers to non-workers and maybe trade) are changing for the worse. Stage two (today’s post) is looking