John Butler

Don’t get carried out (on a stretcher)

For decades global stock markets have been driven in part by so-called carry trades. But these can reverse in spectacular fashion. A recent example was the “mini crash” of last August. Is another such reversal brewing?

A crude warning

Oil prices have declined to their lowest level in three years. Adjusting for inflation makes the real decline all the greater. Iron ore prices are soft too. These could be warnings of global recession. Recent stock market weakness might only be the beginning.

A time for choosing

Transatlantic disputes in trade and defence have escalated dramatically of late. Time is running out for Britain to find a way to leverage the “special relationship” with the US in a way that serves its national interest.

Götterdämmerung? Or Sicherheitswende?

Germany’s presumed next chancellor plans to issue a huge amount of new debt to fund military expansion. That’s likely to be not only expensive but inflationary. The best way to keep costs and inflation down would be for Germany to go nuclear.

Move over DOGE, here comes CORGI

Arguably Britain’s leading Elon Musk fan, founder of craft brewer BrewDog, James Watt, has launched a new initiative: CORGI. Conceived of as Britain’s counterpart to DOGE, it will seek out government inefficiencies, waste and fraud. Or at least it will try.

Inflation: the good, the bad and the ugly

Inflation has been ticking higher again of late ¬– but the truth is, it never really left. While inflation is a net negative for business profitability and economic growth, some industries are better able to deal with it than others. Investors should invest accordingly.

Anatomy of a crash, part 2

Yesterday, we took a look at a handful of historical stock market crashes, their similarities and differences. Today, we turn our attention to the present. Does the current market set-up suggest the risk of a crash is elevated?

Anatomy of a crash, part 1

Stock market crashes, although rare, are a fact of investing life. They may be different in their specific causes, but they do share similar characteristics. Let’s take a look at a few and see if there are any indications whether another may be imminent.

Find your way back: to gold

Trump has expressed his interest in returning the US to the gold standard, calling it a “wonderful” idea. But will he move things in this direction? If so, how? And what impact would that have on gold, foreign exchange and the financial markets?

What if the US revalues its gold?

There’s been much speculation of late that President Trump might issue an executive order to revalue the US Treasury’s gold stock to market. But why? And what effect might that have on gold prices and financial markets?

Germany moves right. Sort of.

Germany will shift to the right following this weekend’s elections. By how much depends on what coalition the leading CDU is willing or able to form. Any new coalition may be as unstable as the last.

More admirals than ships?

Following decades of downsizing, the Royal Navy now has more admirals than ships. This is just one example of Europe’s broader shortfall in military capability. But that may now be changing. Investors should take note.

Where did all the jobs go?

Recent data revisions suggest the US economy is weaker than previously assumed. Yet it has been carrying the rest of the world. If government spending cuts tip the US into recession, global stock markets will be in for a rude shock. Fortunately, defensive investors have some options.

Has the Bank of England solved the “productivity puzzle”?

Someone at the Bank of England appears to be reading Fortune & Freedom. That someone might even be Governor Andrew Bailey. In recent comments he blamed the growing public sector for low productivity. We have been doing so for years.

Invest in what actually works

Labour’s serial flip-flopping on net zero is a distraction. Investors should look through the noise and focus on what actually works. That’s traditional energy, and it is currently trading at a discount to the market overall.

Picks, shovels and profits

There has been a scramble for physical gold of late but investors have other options than hoarding of the metal. Miners are trading at historically low valuations. Royalties companies are also worth considering.

When the music stops

The game of musical chairs can be a useful metaphor for financial market dynamics, in particular crises. But does it apply to gold, a non-financial asset?

Vice, vice (investing) baby!

Although some may find it distasteful, companies servicing human vices can provide a profitable and defensive way to invest. Right here in the UK there are some of the world leaders when it comes to profiting from the rather less exemplary aspects of human nature.

Watching your weightings

Highly cyclical sectors have come to dominate stock market cap in recent years, changing the risk characteristics of the market overall. This is particularly true of the US, which is now more dominated by cyclicals than ever.

The Trump recession

President Trump has a reputation as a pro-growth president. But when pro-growth Reagan entered office the economy fell into a recession. The stock market fell too, reaching its lowest valuation for decades. Might history repeat?