Category: Daily Instagraph

Partners Group is a good example of where a difficult cycle can create an interesting opportunity. The shares are down around one-third YTD and around 60% from their 2021 all-time high, while the company has also announced a CEO transition at year-end. The backdrop remains challenging: a more difficult exit environment, lower performance fees and … Continued

We are not out of the woods yet. Brent is back above $100 a barrel as renewed US-Iran hostilities have brought the risk of further disruptions through the Strait of Hormuz back to the forefront. Oil remains below its April peak, but the renewed escalation shows how quickly the energy risk premium can return. The … Continued

The chart below is quite remarkable. U.S. Treasuries with maturities of 15 years and more are now showing a 10-year rolling nominal total return of around -2% — the worst outcome on record going back to 1793. Our decision at ECP to keep bond duration short over recent years therefore appears to have been the … Continued

The Daily Instagraph is back after the holidays. The valuation case for European equities has become less straightforward. The STOXX Europe 600 is now trading at around 14.8x forward earnings, compared with a 20-year average of 13.4x. Europe still trades at a discount to the US, but this discount has narrowed materially after the strong … Continued

Jan David Meyer, CFA, recently put today’s bull market into a useful historical perspective. Since 1900, S&P 500 bull markets have lasted around four years on average and delivered gains of roughly 135%. At 3.8 years and close to +110%, the current bull market is therefore approaching its historical average duration. Does that mean the … Continued

With the geopolitical situation still highly uncertain and free passage through the Strait of Hormuz yet to be restored, oil continues to trade around USD 90 per barrel—well below its April peak of USD 120. Yet looking at crude oil alone understates the severity of the energy crisis for two reasons. First, inventories are being … Continued

For investors looking for dividend income, Europe currently offers a very different proposition from the US. The gross TTM dividend yield — dividends paid over the past twelve months relative to the current index level — stands at 3.42% for the STOXX Europe 600 and 3.19% for the DAX, compared with just 1.04% for the … Continued

No surprise for regular followers: Berkshire Hathaway remains a key investment in our portfolios. Q2 operating profit rose 16% to almost $13bn, although underlying growth was closer to 6% once currency effects are stripped out. More interesting to us is what happened on capital allocation. After 14 consecutive quarters of net equity selling, Berkshire became … Continued

Today’s graph from the Financial Times shows the share of European households that are net contributors to the State — paying more in taxes than they receive through transfers and public benefits. The striking point is that, in most EU countries, a majority of households receive more from the State than they contribute. In Italy … Continued

Two caveats before discussing gold. First, as it generates no cash flows, a hard asset such as gold is inherently difficult to value: its price is ultimately driven by supply and demand. Second, we rarely rely on technical indicators other than as an overlay to our fundamental analysis. With that in mind, gold rose more … Continued