Capital Compass: The Wisdom of Crowds, the Madness of Markets
Short-term emotion, long-term value Sir Francis Galton was one of those eminent Victorians who seemed capable of turning their hand to almost anything. Explorer, scientist, and statistician, he is famous for the anecdote about the country fair, where attendees were invited to guess the weight of an ox. Individual estimates varied wildly, yet the average […]
Capital Compass: The Piano Lid Problem
Why we cling to what works Richard Buckminster Fuller was an architect, writer and philosopher. He was an optimist about our ingenuity and the power of our unfettered imagination, but he was also aware of our shortcomings and our tendency to make do. This is best illustrated by Buckminster Fuller’s analogy of a shipwreck in […]
Capital Compass: Owning Tomorrow’s Winners Today
Own the future, don’t predict it We are often told that stocks are the best long-term investment. A dollar invested in the US stock market in 1926 grew to more than $14,000 by the end of 2025, equivalent to a return of 10.1% annually, comfortably outpacing both short-term deposits and inflation. The premium of stocks […]
Capital Compass: The Importance of Being Liquid
Appearances can be deceiving The 2008 Global Financial Crisis highlighted the importance of liquidity, whether you were a company or an individual investor. Holding assets that can be sold quickly at a price close to their stated value – typically cash or readily marketable securities – can prove invaluable during periods of stress. The lesson […]
Capital Compass: Tokyo Shift
Japanese corporate governance is changing The 1987 film Wall Street and books such as The Predators’ Ball (1988) and Barbarians at the Gate (1989) portrayed corporate raiders as villains. Yet they also documented a profound shift in Western capitalism. Companies were increasingly judged not by their size, market share, or number of employees, but by […]
Capital Compass: Strait-Line Depreciation
The Strait of Hormuz is losing value On 14th June, the United States and Iran signed a memorandum of understanding to reopen the Strait of Hormuz after months of disruption. Shipping traffic remains subdued as operators seek reassurances over safe passage, but the direction of travel is cautiously positive. Yet the more important story is […]
Capital Compass: Houston, We Have an IPO
But not all investors are on board When a company goes public at a valuation of $1.75 trillion and raises $75 billion in a single day, it is tempting to declare a new era in capital markets. The hyperbole around SpaceX’s IPO has indeed been considerable. As trading begins today at $135 per share, SpaceX […]
Capital Compass: Noisy Neighbours
When smaller allies make big impressions Axios reported that President Donald Trump phoned Prime Minister Benjamin Netanyahu, swore at him, and accused him of ingratitude over threats to bomb Beirut – action that could derail US–Iran peace talks and breach a local ceasefire. A US-brokered ceasefire between Israel and Lebanon has reportedly been agreed in […]
Capital Compass: To Infinity and Beyond!
What SpaceX and Rai stones have in common The island of Yap in Micronesia is famous for its large stone discs, called Rai stones. Once serving as currency on the island, they are still used for ceremonial occasions today. The stones varied in size, but most were so large that they were difficult to move; […]
Capital Compass: No Minister
Governments promise. Markets price. In Yes Minister, Jim Hacker would occasionally discover that, however grand his political ambitions, someone unseen had already decided what was possible. Modern politicians often make the same discovery when they meet the bond market. There is a cynical school of thought that the role of government is to dispense political […]