By leon
Yesterday, we highlighted that the oil forward curve remains in backwardation, with December 2026 Brent prices still in the mid-$70s. Our conclusion was that the oil futures market is pricing a short-term shock rather than a lasting structural oil crisis. In other words, traders do not appear to believe that the current escalation will keep … Continued
By leon
When assessing the impact of the Iran war on financial markets, investors naturally focus on the spot oil price. But the more informative indicator is often the oil forward curve. Today’s graph compares the forward curve three months ago with today. While near-term oil prices have risen sharply, prices for delivery further out have moved … Continued
By leon
The performance of Austria’s 100-year bond since issuance is a striking real-life example of what can happen when investors underestimate duration risk. When the Austrian government issued the bond in late 2017 with a 2.5% coupon, falling yields pushed its price dramatically higher, eventually reaching 237. Today, with the yield at around 3.7%, the bond … Continued
By leon
Exor, the Agnelli family holding company, currently trades at around a 50% discount to its NAV. We first invested in the European Value Fund in March 2020 at an average purchase price below EUR 50 per share. While the stock peaked at around EUR 105 in late spring 2024, performance has since disappointed and the … Continued
By leon
As Warren Buffett rightly said, “The best time to get rich is a crisis,” provided one has independent thinking, financial preparation and the right temperament. Charlie Munger usefully completes the thought: temperament alone is not enough; it must be combined with the right basic idea and pursued with curiosity over a long period of time. … Continued
By leon
As we wrote last week, the key issue was never the headlines alone, but whether the conflict would turn into a lasting oil shock. For now, that is still not what markets are signaling. As John Authers, columnist at Bloomberg Opinion, points out, Brent crude surged from around $84 to almost $119 and then fell … Continued
By Paul Kirch
“The last thing you would want to do is hold money during a war.” — Warren Buffett Current events in the Middle East have many investors looking for the “exit” button. But market history — including the Dow’s performance during WWII — suggests a different path. Please find attached ECP’s full Middle East Analysis and our recommendations … Continued
By leon
As we write this morning, the conflict with Iran is clearly intensifying and financial markets are reacting accordingly. Brent crude has surged above USD 110 per barrel, Japanese equities are sharply lower with the Nikkei down around 7%, and both European and US futures are deeply in the red. In other words, markets are no … Continued
By leon
Technology, Media & Telco stocks are experiencing one of their worst starts to the year relative to global equity markets in the past 50 years. Stretched valuations, concerns over excessive concentration in a handful of Big Tech names, and rising fears of AI disruption, particularly in software and media, are weighing on investor sentiment. Many … Continued
By leon
To put the market impact of the Iran conflict into perspective, today’s chart shows the performance of the Dow Jones during World War II, alongside an instructive comment from Warren Buffett on what to own in wartime: “Well, if you tell me all of that [major wars] is going to happen, I will still be … Continued