Beyond The Headlines

Here we will post regular letters covering our current macro and micro views.

Three Times is the Charm
September 14, 2023 | Diandra Ramsammy

Only earlier this year, someone I know told me – “What are you worried about? Airlines don’t go bankrupt anymore?” My ears perk up when I hear a statement shared with so much conviction. I don’t recall ever holding shares of a company that went bankrupt. I held tickets of three bankrupt airlines in my life, though, and the third one was only this year soon after my colleague’s confident declaration. Why do businesses go bankrupt anyway, and how can we avoid owning them?

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How Does It Feel?
August 31, 2023 | Diandra Ramsammy

Warren Buffett and Charlie Munger were asked about emotions at the last Berkshire Hathaway Annual Meeting. You’d think it’s an unlikely question to ask two investing legends at the shareholder meeting, is it though?

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H1 2022 & H2 2023 Review
August 3, 2023 | Diandra Ramsammy

It feels a lot calmer – that’s how I described the last six months to one of the clients recently. We witnessed a whirlwind of events during the three pandemic-stricken years from 2020 to 2022. Investors endured a crash and recovery in 2020, a broad bull market in 2021, followed by a year of pause and correction in 2022.

Throughout these years, market participants and all of us experienced major shifts. Interest rates were slashed to zero before soaring to multi-decade highs, the economy plunged only to rebound significantly, and the stock market embarked on its own tumultuous journey. The post-pandemic boom era ushered in a wave of “right-sizing” among businesses.

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Poor Market Breadth is a Contrarian Opportunity
June 21, 2023 | François Sicart

I  recently returned from France, where local colleagues pointed out how a few high-capitalization (market value) names were disrupting the performance game for French money managers. Popular luxury-oriented companies– which had already outperformed the CAC 40 index for several years thanks to superior operating performances – have further accelerated recently with signs of recovery in China’s consumer spending.

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The Profit: Who is Better Off?
June 7, 2023 | Diandra Ramsammy

If two people start with nothing, one is earning $100,000 a year, the other $50,000, but the first one is left with $5,000 after all taxes and expenses, and the second one with $10,000, which one is richer? One would need almost twenty years to save one year of expenses, the other four years. When it comes to personal finance, the concepts can get a bit confusing. Let me explain.

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Contingency Plan
April 13, 2023 | Diandra Ramsammy

I grew up in Poland and saw the last decade of a failed economic experiment where everything was owned and operated by the government. Hardly anything ever worked, and nothing was ever on time. I thought the whole world worked this way; fortunately, it doesn’t! The Iron Curtain fell, and an unbelievable economic miracle followed. This young mind was already shaped, and I grew to appreciate having a backup plan and never trusting that any rescue was coming. I still love having a contingency plan, even if there is no crisis in sight. Let me explain.

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In and Out of the Market
March 30, 2023 | Diandra Ramsammy

The stock market trends up over the long run. It’s far from a straight line. You’ll see many ups and downs. The shorter you’ve been investing, the more enthused you get amid a bull market, and the easier you’ll give in to the fear of missing out. The longer you invest, the more downturns you’ll see and the more patient you become. It’s vital not to scare yourself out of the market and rather see investing as a lifelong pursuit. Oscillating between 100% invested and 0% invested is not the path we take. We believe there is a happy middle ground, slow, steady, calm, and collected. Let me explain.

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That One More Question
March 16, 2023 | Diandra Ramsammy

Investing is all about the quality of questions. I’m coming up on two decades of my career. I  have sat down and talked to countless executives from various companies. I have listened and read through more quarterly earnings than I dare to admit. It’s been all in the name of learning. I heard many answers, but it was the questions that stood out to me. I kept collecting them in the process. They proved to be evergreen and continue to help me find the answer that can make or break an investment. Let me explain.

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As Adam Said To Eve, The Great Transition – 30 Years Later
February 13, 2023 | François Sicart

Back in June of 1993, I wrote a short paper entitled “As Adam Said to Eve.” Until that point in the 1990s, the global system had been led and controlled by the United States and that was slowly changing.

In my paper I pointed out that serious economists and historians are prone to claiming that we are in a period of transition. Today, after several recent economic accelerations and slowdowns, this prediction seems to be gaining momentum again. We may in fact be in phase two of the Great Transition announced 30 years ago.

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Selective Ignorance
January 19, 2023 | Diandra Ramsammy

As the news of the implosion of one of the crypto exchanges hit the headlines recently, I have been thinking about how I was completely unaware of who Sam Bankman-Fried is, what FTX does, or anything related. Apparently, this $32 billion venture had the backing of some serious seasoned investors. Its executive was patted on the back by legends of the world of politics and business. Its product was endorsed by star athletes, all while he was giving outsized political contributions. I must have very successfully exercised selective ignorance since I wasn’t abreast of any of it. I honestly don’t think I really missed anything, though. Let me explain.

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Not The Wrong Question, Yet, But The Promise Of A Right Answer
November 18, 2022 | François Sicart

On January 14th, I published this article which predicted that one of these days, after a spectacular decade of progress, the stock market would encounter a serious air pocket. Investors  would then ask the perennial question, “What caused the market collapse yesterday?” But this is not a helpful question. The more discerning  inquiry would really be, “Why did the market rise so much before yesterday’s crash?”

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Long Shelf Life
November 9, 2022 | Diandra Ramsammy

Amid this year’s market’s ups and downs, a friend asked me if I was watching the daily market news. I said that I was not. The daily media reports often share extreme views, and the more dramatic they are, the more airtime they get. He was intrigued and curious about how I knew what to do then. I said that we rely on our research, which leads to insights with long shelf life. We can’t find those in the daily news. Let me explain.

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Is The Market Wrong?
October 25, 2022 | Diandra Ramsammy

A stock investor friend asked me that recently. There is much more to it than a simple yes or no answer. He wasn’t looking for a simple answer but wanted to spark an interesting conversation. I did my best to answer it, and here is what I said.

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October 11, 2022 | Diandra Ramsammy

When the market takes a seemingly unexpected turn in either direction, we often get familiar phone calls from clients. They tell us: “We know what you are doing (whether it’s buying, selling, or waiting at the time); we just wanted to hear your voice and wish you good luck.” There are no surprises; we value consistency in what we do, and so do our clients. Let me explain.

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The Best Time is Now
September 27, 2022 | Diandra Ramsammy

What’s the best time to start investing? The best time is always now.

Sitting under a tree this summer, hiding from the heat of the sun, you might have thought about the best time to plant a tree. Or, like I did, quietly said thank you to whoever planted it decades or centuries ago. A Chinese proverb tells us that the best time to plant a tree was twenty years ago, and the second best is now. Investing is the same.

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First Half 2022 Review
August 18, 2022 | Diandra Ramsammy

Never a dull moment — that’s the best way to describe the last two and half years in public equity investing. We’ve had a flavor of a late bull market (early 2020), a panicked pandemic sell-off (spring 2020), a quick market recovery (2020-21), followed by yet another correction (late 2021 to summer 2022).

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The Ode to the Market (and Speculators)
August 4, 2022 | Diandra Ramsammy

I had an inspiring call with a young investor recently. I’m always open to taking a call with anyone curious about investing. I’m still as passionate about investing as I was two decades ago. If anything, I find more reasons to be. Our call made me think that the stock market no matter how volatile, imperfect, or disturbed it seems; it’s a truly beautiful invention – let me explain.

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Where is the Bottom?
June 16, 2022 | Diandra Ramsammy

We’ve had days and weeks recently when stock prices only pointed downwards. The major US indices fell some 20%-33% from their highs recorded late last year. It’s no surprise that we are all wondering where the bottom could be. Let’s see what we can find out.

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Hot or Cold
June 1, 2022 | Diandra Ramsammy

Have you ever used those old-school hot and cold faucets? Some older hotels may still have separate faucets, one with scorching hot water and the other with bone-chilling cold water. If you burn your fingers in one, you can at least cool them down in the other. A happy middle would be preferable, but it’s not always available. The stock market sentiment seems to have only two options, too: hot or cold, and rarely something in between. Let me explain.

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Against Our Nature
May 18, 2022 | Diandra Ramsammy

I walked into a snake pit. It was among the more memorable moments of the last two years. On one of our early pandemic hikes in the Appalachian Mountains, my wife Megan and I found six rattlesnakes basking in the sun. They blended in so well, and we were blinded by the sun. Despite that, it only took my brain an instant to register a snake-looking shape, and my body froze, my heart started pounding, and my breathing sped up. It was a true fight or flight, a life or death moment. A million years of evolutionary conditioning jolted me away from imminent danger into safety. It’s part of our nature. Yet, in investing, we have to go against our nature and deeply ingrained instincts, time after time. Why is that? Let me explain.

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The True Cost of Things
April 28, 2022 | Diandra Ramsammy

I was on a video call last week. We were using someone’s else link, and 40 minutes into our conversation, we were cut off. My host realized that his free video calling plan only allows limited use per call. I know he upgraded to a paid plan since, but that experience reminded me of a more significant phenomenon. We are quickly learning the true cost of many services we use, and it has important consequences for how we invest. Let me explain.

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When the Appetite for Risk Disappears
April 6, 2022 | Diandra Ramsammy

It was 2010, and I was sitting at an IPO (initial public offering) lunch in Manhattan shortly after the 2008-2009 financial crisis. This was one of the companies going public soon after a dry spell of the previous two years. It had a big market share, highly profitable business, a strong balance sheet, a growth story to share, and most of all, a very reasonable valuation. You’d think it was a stockpicker’s dream. The interest was tepid at best, though. Investors seemed to have lost all their earlier appetite for risk and… returns for that matter. Reminiscing about that IPO, and looking at the last two years, and especially the abrupt year-to-date investor hesitation both in public and private markets, I started thinking about the ups and downs of the infamous – appetite for risk. What is it? Why does it matter?  

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Reflections on the Shape of Stock Market Bottoms
April 4, 2022 | Diandra Ramsammy

Bob Farrell, the iconic one-time investment strategist at Merrill Lynch, formulated Ten Basic Rules of Investing, which have since become a “must” reference for students of the stock market. One of these pronouncements stated that “Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.”

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Second Half 2021 & YTD 2022 Review
March 17, 2022 | Diandra Ramsammy

As we are putting the finishing touches on our update (3/2022), the market seems to have hit a temporary invisible wall. It doesn’t mean that there are no compelling opportunities to add to our portfolio, quite the contrary. The renewed volatility already drove down the prices of a good number of potentially interesting companies.

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Beware of Economic Forecasts in Investing
March 7, 2022 | François Sicart

As a group, economists (or practitioners of what is often called “the dismal science”) have failed to anticipate some of the most severe recessions and best economic recoveries of the last century. Even as a professed contrarian, however, I cannot defend their forecasting record. I would also take with a grain of salt the advice of investment strategists who base their recommendations on what economists expect the economy to do. Paraphrasing Goethe, “when ideas fail, [big] words come in very handy.”

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Can We All Be Contrarians?
February 3, 2022 | Diandra Ramsammy

The major US indexes sold off in the last few weeks. This inspired a whole range of reactions. Many panicked, some froze, and others quickly acted and bought selected stocks. The last group is usually smaller and follows Warren Buffett’s famous wise words: “be fearful when others are greedy and be greedy when others are fearful.” If we define a contrarian as someone who tends to go against the crowd, I start to wonder if we all can be contrarians at the same time? Can we?

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Always the Wrong Question
January 14, 2022 | François Sicart

One of these days, after a spectacular decade of progress, the stock market will encounter a serious air pocket. The investing crowd will then ask the perennial question: “What caused the market collapse yesterday?” But, as usual, this will be the wrong question. The intelligent inquiry would really be: “Why did the market rise so much before yesterday’s crash?”

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New Year’s Resolutions
December 21, 2021 | Diandra Ramsammy

As 2021 is coming to an end, and a brand new 2022 is right around the corner, many of us start to think about New Year’s Resolutions. What do we want to accomplish next year and beyond? Traditionally many look for ambitious goals: make that many dollars, lose that many pounds, read the many books by year-end, and more. In life and investing, success often comes not from a lofty goal with a fixed deadline but rather the process built on helpful habits that lead to favorable outcomes. Let me explain.

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Immune to Ridicule
December 9, 2021 | Diandra Ramsammy

In the early years of my investing career, one particular stock attracted the most ridicule. I remember how various junior analysts would mention it to the more senior analysts and portfolio managers. It was the epitome of a bad idea, a fad, a laughing stock even. My contrarian bone must have been already developing at the time. Somewhere in the back of my mind, I thought, what if they are wrong?

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November 15, 2021 | François Sicart

During the pandemic, I have been using my forced time out of the office to review in detail my investing experience of the past fifty years – hoping to gain some enlightenment from this broad view.

My first observation is that, contrary to public complacency induced by twelve years of the current bull market, there have been some serious breaks in the progression of the major indices over this time span.  I experienced these at first hand, and a partial review is very enlightening.

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Time Traveler’s Portfolio
October 28, 2021 | Diandra Ramsammy

With almost every other tech billionaire building a space rocket these days, it dawned on me that time travel compared to space travel remains still completely undiscovered. There is no cryptocurrency, SPAC (special purpose acquisition company), VC fund (venture capital), or ETF (exchange-traded fund) that invests in time travel (that I know of). Not yet, at least.

If I were a physicist, I’d be curious what kind of laws of physics we need to bend to make it happen. If I were an engineer, I’d be researching durable and light materials to build a time machine. Since I’m an investor, it should be no surprise that I’d like to know what kind of portfolio I’d take with me on this journey!

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October 8, 2021 | François Sicart

Famous quotes are difficult to attribute. Mark Twain may never have said that “history does not repeat itself but that it often rhymes.”   Winston Churchill may have been paraphrasing George Santayana when he wrote that “Those that fail to learn from history are doomed to repeat it.” Still, with these maxims in mind, I have tried to recall a few investment episodes from my own experience when I learned something that would help me avoid future mistakes.

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Penny Wise, Pound Foolish
September 23, 2021 | Diandra Ramsammy

Pennies, cents, pounds, dollars, euros – it’s sometimes curious how we think of money. A while ago, I remember someone sharing with me a tale of old Wall Street. With a lot of self-made fortunes, many investors tended to be penny-wise but at times pound foolish. The smaller amounts were easier to relate to, they felt familiar, and the larger ones were so disproportionately big that the right penny habits didn’t capture them. Doesn’t it happen to us all now and then?

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Nostalgia isn’t what it used to be
September 1, 2021 | François Sicart

I was reorganizing my library this week and came across many books that I had not opened in years. Among them was a little booklet published by The Free Press under the aegis of New York University, entitled “The Rediscovery of the Business Cycle.”

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2021 First Half Review
August 4, 2021 | Diandra Ramsammy

When we discussed 2020, we emphasized the importance of patience and timing. We started 2020 with a cautious stance. Our patience paid off when in March 2020, we witnessed one of the fastest market corrections on record. We acted quickly and deployed capital buying securities available at multi-year low prices. It was a brief but hugely attractive window of opportunity for disciplined investors. We have been reaping benefits since.

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Words Do Matter
July 1, 2021 | Diandra Ramsammy

I remember standing in front of Casino de Monte-Carlo in Monaco when I was a kid. I enjoyed looking at some of the cars parked in front of it. I have visited this sovereign city-state three times since. I like the windy roads, the vistas, the weather. I don’t recall ever being inside a casino in my life, though. I have never gambled in one, but I consider myself a lifelong investor, a stock picker, a business owner. It worries me how much the vocabulary, the words around investing, start to sound like something one would overhear among roulette players or slot machine enthusiasts. I believe that words do matter, and the more investing sounds like gambling, the more unwanted trouble you may get yourself into.

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It’s Always the Right Time
June 10, 2021 | Diandra Ramsammy

I remember getting introduced to a new client a while back. I was a novice portfolio manager. I was looking forward to our meeting, but I faced a bit of a challenge. I wanted to impress him with some new investment ideas that we could use right away. The stock market was reaching multi-year highs, everything looked pricey, and I had no immediate stocks I wanted to buy. The meeting went very well despite that, a nice lunch followed it, and I learned a lesson that day that I’ll never forget. It’s always the right time to starting investing. Let me explain. 

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Long Stories and Three Lessons
June 3, 2021 | Diandra Ramsammy

Catching up with friends and family recently, I noticed how there are no short and simple stories that cover the last 15 months. Any small question could be prefaced with “it’s a long story.” Some of us stayed put, some of us relocated. Some continued to travel to work; others turned our homes into offices. We’ve all seen many COVID peaks and a variety of responses to them. Though it’s been a long 15 months, with many long stories, there are at least three lessons that stood out.

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A Noisy Distraction
May 6, 2021 | Diandra Ramsammy

It’s been a long while since I watched any financial news channel. That changed last week, though. I was sitting on a plane (still a rare occurrence these days). The screen in front of me was split to accommodate half a dozen talking heads. Stock quotes were running in multiple lines at the bottom and headlines on the right with some charts. I didn’t have the right headphones with me, and I couldn’t listen to it, but I felt that this silent screen was screaming at me, desperate for my attention.

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Phantom Losses & Neighbors Getting Rich
April 22, 2021 | Diandra Ramsammy

What are “phantom losses?” — In investing, we have gains and losses, but how many types of both are there? Last summer, I wrote a short article about two types of gains. Some recent conversations with clients, colleagues, and fellow investors made me realize that there are more than two types of losses. There are realized losses, unrealized losses, and apparently also “phantom losses.” I like to learn new things, and this was definitely a bit of a discovery. I felt compelled to share it with you, so here it is!

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What’s Essential?
March 31, 2021 | Diandra Ramsammy

Last week, my wife Megan and I enjoyed the company of a German-Brazilian couple who also found refuge in our quaint seaside town. They sail and surf and have navigated the COVID travel realities getting stuck places and changing plans quickly. We compared notes and shared our experiences. We thought we pack light, but they pack even lighter. Megan brought up the topic of searching for what’s essential in the last 12 months. Beyond health, family, friends – what else is truly essential?

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Kicking the Tires: The Future of Due Diligence
March 18, 2021 | Diandra Ramsammy

I remember sitting in a pilot seat of a massive Boeing 777 cargo plane. It was just me with no co-pilot by my side. I wrapped my fingers around the control yoke; I reached for the throttle with my right hand. In my mind, I was ready for takeoff. It wasn’t a dream! It happened almost a decade ago. As a small perk of my research work investigating companies, I got to visit the FedEx facilities in Memphis, Tennessee. I shook hands and exchanged pleasantries with the founder and CEO, Fred Smith. Then I joined a group of portfolio managers on a small bus to the airport. I love planes and airports; they didn’t have to ask me twice. We got to see a new Boeing 777. We were kicking the proverbial tires and doing our due diligence, and those were some big tires to kick!

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Two More Cents
March 11, 2021 | Diandra Ramsammy

Last month, the New York Stock Exchange president penned a historic opinion piece in the Wall Street Journal with an attention-grabbing title: “The NYSE Isn’t Moving—Yet.” The author shared how the new local tax ideas could force this over 200-year-old New York institution to find a new home. NYSE wouldn’t have had this kind of freedom of location independence had the last 12 months of remote work never happened. He writes: “We’ve proved, by pandemic-driven necessity, that we can close the physical trading floor on a moment’s notice and maintain service without missing a beat. Similarly, the broader financial services industry shuttered offices and shifted workforces, without hiccups to remote locations.” – we can’t help but notice that something immensely important has changed.

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Deep Dive: The Biggest Disruption — The Remote Work Revolution
February 24, 2021 | Diandra Ramsammy

Megan and I are staying now in a quaint Caribbean fishing town a few hour flight away from our New York office. When it comes to time zones, I’m equidistant from the West Coast and London, which has been very convenient taking calls, and Zooms. In the morning, I’m more likely to see returning happy fishermen than running frantic commuters. I’m definitely outside of the traditional daily commuter radius. I’m working remotely, and our whole team is working remotely. All we need is reliable high-speed internet.  Maybe it would have been feasible years ago, but today, it’s not only feasible; it has become second nature and increasingly common practice. What happened?

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Not for profit
February 18, 2021 | Diandra Ramsammy

The last twelve months brought many new exciting IPOs; new companies got listed on the stock exchange and made their shares available to stock investors. Not all of them seem as promising as their prices would imply. They got me thinking of a conversation I had a few years ago when I met an enthusiastic entrepreneur. He started a venture, which provided a service that the local community enjoyed. The economics didn’t work, though. There was no profit. His solution to the problem was getting more investors. He openly admitted that profit is not the goal of this particular entity. Hearing that, I suggested he turns it into a non-profit and accepts donations. He laughed and said – “No, no, I want to grow it and sell it.” Interestingly enough, I believe that’s the mindset of too many entrepreneurs these days. Why earn a profit if you can grow it and sell it?

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Can we learn anything from GameStop?
February 1, 2021 | Diandra Ramsammy

In the last few weeks, everyone’s attention has been captured by unusual price action in a particular stock – GameStop. It rose many times over, and a few more times on top of it. It’s gone up about 20x in a matter of weeks, and most of it in days. The media gave small retail investors credit for this eye-popping price move, and it came at the expense of a small group of prominent hedge fund investors who were on the other side of that trade. At first, it may seem that we are looking at a biblical moment of David’s victory over Goliath – but is it really so?

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January 28, 2021 | François Sicart

In a 2016 article entitled “Why Does Pessimism Sound So Smart?” Morgan Housel mentioned the English philosopher John Stuart Mill. It was Mill’s observation,150 years ago, that the individual  most admired as a sage is “not the man who hopes when others despair, but the man who despairs when others hope.” At Sicart Associates, as convinced investment contrarians, we agree with Mill’s perception. Pessimists do often appear smarter than optimists because they acknowledge the complexity of situations and thus appear profound. Optimists, in contrast, tend to be perceived as superficial or naïve.

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The Three Disconnects
November 18, 2020 | Diandra Ramsammy

I often ask my partner and mentor, François Sicart, to share more about investing in the 1970s and the 1980s. We both like to find themes, parallels, lessons in the past that may help us understand today and the future. I can picture a younger client, or portfolio manager asking me in 2050 to tell him or her more about 2020. I will be a young 70-year-old at that point. I will refresh my memory and look for a theme or maybe even just one word. That word will likely be – the disconnect. There are at least three major disconnects occurring this year. First, the stock market has decoupled from the real economy. Second, a handful of mega-cap tech stocks took off and left the rest of the market behind. Third, those who were able to work from home have experienced a very different year than those whose jobs were lost because their work depends on the face to face interactions.

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The Other Unicorns
November 12, 2020 | Diandra Ramsammy

A unicorn might be the famous mythical creature with a spiraling horn projecting from its forehead, but in the investing vocabulary, a unicorn is a privately held startup priced at over $1 billion. The unicorn as a term with its Latin and Ancient Greek roots signifies something desirable but hard to find. CB Insights lists 495 unicorn companies in the world. There are 500 companies in the S&P 500, the US stock index that includes the 500 largest companies. If there are almost 500 unicorn companies, are they still that rare and hard to find? This revelation made me think of the other unicorns. Not the highly-priced new exciting companies that have yet to prove their business models, but the older, more established companies that trade at low valuations (less than ten times their annual earnings, for example). There aren’t many of them to be found.

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September 30, 2020 | François Sicart

I was prompted to write this paper by a new book from Ben Carlson, author of the always-stimulating blog “A Wealth of Common Sense.”  Reading his book Don’t Fall for It: A Short History of Financial Scams (Wiley, 2020) reminded me what I really always knew: speculative bubbles do not need fraudsters to happen. The victims can both create and succumb to the schemes all by themselves — out of ignorance or greed, and sometimes both.

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An Apple, A Plague, and A Bubble
September 17, 2020 | Diandra Ramsammy

I imagine that almost everyone has heard the story of young Isaac Newton watching an apple fall from a tree, which inspired his theory of gravity. A story he shared himself in his memoirs. I will guess that a few would know that he was home at the time, away from school due to a plague going around. And I can bet that even fewer know that the same Newton made some money, but lost a fortune in a stock bubble of his time!

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Boring Stocks for Exciting Times
August 27, 2020 | Diandra Ramsammy

Recently we had the pleasure of hosting an investment idea Zoom call. Normally, we’d have an intimate “idea lunch” in our Manhattan high-rise overlooking Central Park and the Hudson River. This time, our team and a number of guests (friends of the firm) all tuned in from around the country and as far abroad as Mexico and Bermuda! Only their backgrounds of trees outside the window, beautiful bookshelves, and nautically themed paintings could reveal where they might be. Among the stocks we discussed, we came up with some interesting ideas that we call boring stocks for exciting times.

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Risk-Free Rate, Rattlesnakes, and the Revolutionary War
August 13, 2020 | Diandra Ramsammy

In these Covid-era days, we often have to make unfamiliar choices, many of which involve deciding among levels of risk. Megan and I like to break up our work routine and step away from our laptops now and then. Situated as we are in the woods, hiking has become a pleasant escape. Some trails pass right by our cabin, and we can reach others a short drive away. What we’ve learned is that we have a choice between busier trails and less-frequented ones. The former carry a risk of running into someone sick, so we carry masks. But the latter sometimes present the unpleasant surprise of big fat rattlesnakes basking in the sun. Either way, we have to accept a certain risk, and realize that even an innocent hike is not really risk-free!

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August 5, 2020 | François Sicart

Some years ago, I advised my clients: “Never invest in something where you can’t lose money”. This was the time when investors were beginning to mistake market volatility for risk, (which has now become a habit) and financial marketing departments were obliging the hungry crowd with a multitude of mathematicians-created products that promised to make you money whether the market went up or down. Face you win, tails you don’t lose.

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July 6, 2020 | François Sicart

Back in 1999, at the peak of the bubble, I wrote an article entitled “AOL, RCA and The Shape of History” (December 1999) and was inspired by the chart below, borrowed from that Thanksgiving’s issue of The New Yorker. It compared the 1920s bubble in the shares of RCA to the stock performance of AOL in the late 1990s.

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Liquidity vs. Reality
June 12, 2020 | François Sicart

As I began writing this paper, the following headline flashed on Wall Street rally gains steam, with the Dow up 900 points after record surge in US jobs. It didn’t take long for the media to endorse a new narrative: Trump declares jobs coming back on heels of surprise labor report ( and Trump: This is a ‘rocket ship’ recovery (, for example.

To me, these are just the latest instances of how, in the last few years, financial markets have been interpreting any kind of good news, or even the simple promise of good news, as a signal to jump onto the bandwagon of the decade-old bull market and, in today’s language, to adopt a risk-on investment posture.

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Train wreck or a train you can’t miss?
June 11, 2020 | Diandra Ramsammy

To most of us, the March stock market sell-off might have felt like a train wreck, but today in early June the fast stock market rally may feel like a train you can’t miss. Which one is it then?

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Preparing to be prepared
May 27, 2020 | François Sicart

I began my investing career in 1969, following the value philosophy enunciated by Benjamin Graham in his seminal book Security Analysis (1934) and the later (and lighter) The Intelligent Investor (1949).

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Power out, lights out!
May 8, 2020 | Diandra Ramsammy

Whenever I speak about investing to audiences across the country and around the globe, there is a question that almost always comes up. For years now, I’ve been asked about the 2008/2009 financial crisis. Someone in the audience usually wants to know what I was thinking at the time and how investing felt in those days. In the coming years, if anyone asks me how March 2020 felt, I have my answer ready– power out, lights out!

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A sprint, a marathon or a very long hike
April 28, 2020 | Diandra Ramsammy

As I’m sitting today on the porch of a tiny rustic cabin situated next to a creek in thick woods, just a short walk from the Appalachian Trail (a 2,200-mile (3,500 km) hiking trail, the longest in the world, that stretches along the Eastern United States from Springer Mountain in Georgia to Mount Katahdin in Maine), I start to think about the sprints, the marathons, and the very long hikes in life and in investing.

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Are we there yet?
April 20, 2020 | Diandra Ramsammy

I remember taking long road trips with my parents as a kid. We would pack our small Fiat, and head out. Once we visited the lake country in the northwest corner of Poland, and another time it was the beautiful coast of the Baltic Sea. My favorite destination was the charming, often snow-covered Tatra mountains in the south. And like any other kid, the longer the drive, the more often I’d ask — Are we there yet?”

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Buying companies when they lose money
April 16, 2020 | François Sicart

One of my early and most influential mentors, Walter Mewing, began his career before the Great Depression as a messenger on Wall Street. Reportedly, just before the onset of the Depression, he sold all the stockholdings he had managed to accumulate from his small savings in order to buy a chicken farm. Upon returning to Wall Street in the early 1930s, he embarked on a career as a financial analyst and investor. Somehow, he became a partner with my other two (much wealthier) mentors and the much younger Christian Humann, who eventually became my boss and, ultimately, partner.

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Rethink, Reset, Restart
April 7, 2020 | Diandra Ramsammy

One way or another, we have all paused in the last few weeks. It’s been over a month since Megan and I were sitting on packed suitcases ready to fly first to Paris, and then to Warsaw. Our return flight would have been just a day before the ban on flights from Europe was imposed. Looking back, we are glad we decided to forego our trip. Since then though, with the first day of spring already behind us, we have all had a chance to rethink, and reset as we wait to restart our daily routines.

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Second-Order Thoughts
April 1, 2020 | François Sicart

First-order thinking is the process of considering the direct implications of a business decision or policy change. Second-order thinking is the process of identifying the consequences of actions prompted by first-order thinking.

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Investing in times of pandemic
March 23, 2020 | Diandra Ramsammy

The last few weeks have felt like years to most of us. Out of nowhere, we have been wakened from a low-volatility, 11-year-old bull market to a stormy market crash. We’ve seen record-breaking daily moves, mostly downward. Three years of gains have been erased from the major indices in as many weeks, a process that feels like taking a slow escalator up and a fast elevator down.

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Bring out the towels
March 18, 2020 | François Sicart

Warren Buffett famously quipped that we only find out who had been swimming naked when the tide goes out. During the spectacular bull market since 2009, many “professionals” and people relying on their advice had been insisting that we were holding too much cash in our accounts. Our guess is that many naked swimmers who followed their advice are now beginning to sell shares indiscriminately out of either panic or lack of liquidity. Nothing new there: this is what typically happens after periods of greed, thoughtless complacency or fear of missing out in a rising market.

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Dealing with Uncertainty
March 16, 2020 | Diandra Ramsammy

“Investing is dealing with imprecise assumptions tainted by an imperfect world haunted by uncertainty” – that’s how I described investing in my 2015 book – Outsmarting the Crowd: A Value Investor’s Guide to Starting, Building, and Keeping a Family Fortune. Uncertainty is always a part of investing…

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In Search of Calm
March 9, 2020 | Diandra Ramsammy

The last few weeks have been anything but calm. We keep on learning more about the coronavirus spread around the world, and the decisions made to address it. We certainly hope that all the right steps will be taken to not only slow it down, but also to provide sufficient help, and care to those in need.

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The Point and Challenge of Being Prepared
March 3, 2020 | François Sicart

Beyond the traditional choice of our investment management style between categories such as value or growth, fundamental or technical, trading or buy-and-hold, we have tried to abide by two precepts…

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Always keeping a steady course
February 28, 2020 | Diandra Ramsammy

We talked about it, we wrote about it, but now that it is happening, it’s never fun to watch. We knew that it’s a matter of time when the market catches up with the reality. What is always impossible to say is – when. We took the best approach that worked in the past, and was likely to work in the future. We took money off the table, pruned the most vulnerable positions, held excess cash, avoided the highest-flying stocks that have the most room to fall.

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We don’t time the market; we don’t know how
February 25, 2020 | Diandra Ramsammy

Recently I had a conversation with a prospective client who wanted to know about our experience managing family fortunes over generations. Coming from a money manager who always likes to be fully invested, he was intrigued by our choice of holding some cash on the sidelines, ready to invest. “So, you’re timing the market?” he asked. I answered with a smile that we don’t time the market, we don’t know how.

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Value and momentum: the tortoise and the hare
February 3, 2020 | Diandra Ramsammy

Chances are that you remember Aesop’s ancient fable about the Tortoise and the Hare. In case you need a reminder, in that tale the speedy Hare mocks the slow-moving Tortoise, who then challenges it to a race. The Hare sets a scorching pace and leaves the Tortoise far behind. Then, sure of its victory, it takes a nap, only to find out later that the Tortoise has slowly but steadily won the race! The investment terms “value” and “momentum” often remind me of the heroes of Aesop’s fable. Value investing is a steady tortoise, and momentum investing is a jumpy hare. Value investors buy cheap stocks, momentum investors buy stocks that have been going up.

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Tesla and the Dark Alleys of Investing
January 29, 2020 | Diandra Ramsammy

In investing, as well as in life, it pays to avoid dark alleys. Common sense and experience teach us what those dark alleys might be in life: dangerous places where trouble lurks and help might come too late. In investing, dark alleys are investments that can get us in serious trouble, and the worst of them can lose money for bears and bulls alike.

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What if this market will go up forever?
January 13, 2020 | Diandra Ramsammy

In a recent conversation, a prospective client asked me a timely question: “What if this stock market will go up forever?” There are no words that have created more investment opportunities on the one hand and investment trouble on the other than “never” and “forever.” Investing requires us to continuously make our best-educated guesses about the future. The stock market aggregates those guesses in the most efficient way, but it’s driven by fear and greed, and oscillates between those two absolutes of “never” and “forever.”

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When fortunes are made, when fortunes are lost
December 31, 2019 | Diandra Ramsammy

The worst investment advice I ever received was the recommendation to get out of stocks and buy U.S. Treasury bills at the bottom of the market. It was a cold winter evening in March 2009, at the deepest point of the most recent financial crisis (though we couldn’t know that then). I was four years into my investment career in New York City. I was invited to an idea dinner at a very pleasant midtown restaurant. It was a group of top-notch investors around the table, most of them a few decades older than me, and the general feeling was that it was time to abandon stocks for T-bills…

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The Ultimate Argument for Holding Cash
December 5, 2019 | Diandra Ramsammy

With the stock market at an all-time high, patient and disciplined investors have gone right out of fashion, but that’s how we at Sicart still proudly identify ourselves. We don’t just attempt to hold the best- quality businesses we can identify, which we seek to buy at the lowest possible prices. We also remain historically underinvested, holding substantial (and seemingly idle) cash.

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The Tale of Two Books
November 25, 2019 | Diandra Ramsammy

As readers of my articles, you probably know well that books are very important to me. This is an account of two that have been a great influence on me, in very different ways. I discovered both of them around 20 years ago. One has defined my career, and the other still defines stock markets and the economies around the world. The first one I bought, and cherish. The other one I browsed through carefully once, but never cared to own … was I wrong?

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The Art of Cashing Out
November 21, 2019 | Diandra Ramsammy

With stocks at all-time highs, some tech IPOs falling short of expectations, and one huge IPO spectacularly imploding before take-off, some investors may be wondering if there is an art to cashing out. This may be a good time to look at two examples from twenty years ago, during the Internet Bubble.

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Asset rich, but income poor
September 4, 2019 | Diandra Ramsammy

With interest rates dropping and yields disappearing while asset prices hover at all-time highs, we find ourselves in a highly unusual predicament. Over the last few years, in many conversations with clients, friends and fellow investors, I have come across a recurring phenomenon. On one hand, over the last ten years they have witnessed an unprecedented rise in the prices of their assets. However, they see that it takes a lot more capital to generate the level of income they’re accustomed to. In other words, they are asset rich, but income poor.

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August 16, 2019 | François Sicart

Part I of this paper (July 30, 2019) concluded that conditions have gathered for a “Minsky Moment” (the time when apparent financial and economic stability turns into instability and eventually financial crisis or recession). The wait may be long for that precise moment to materialize, but since, as the saying goes, “trees don’t grow to the sky,” education and experience can give us a pretty good idea of the ultimate outcome. Thus, the main challenge lies in determining the likely timing of that moment, which is what we are going to investigate in this Part II.

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August 5, 2019 | François Sicart

A few weeks ago, I had lunch with my old friend and colleague Jean-Marie Eveillard, an investment manager whose career has been as long as mine and quite successful, including the stewardship of one of the first global funds from $15 million to $50 billion and a Lifetime Achievement Award from Morningstar. But his feat I envy most is his statement during the Internet bubble of the 1990s, which we both shunned, that: “I would rather lose half my shareholders than lose half my shareholders’ money”. Over lunch, we naturally wound up reminiscing about the speculative bubbles we had lived through and their aftermaths…

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Fighting the currents; a metaphor for the next decade of stock investing
January 28, 2019 | Diandra Ramsammy

Scuba diving in treacherous currents of the South Pacific reminded me of Mark Twain’s words —“What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.” In a warm atoll, all my experience could have gotten me in trouble because I was in an environment with many completely new conditions. And that’s exactly how we at Sicart feel looking at the stock market environment today. In some respects, it looks familiar, yet it’s different enough from the past to get us into real trouble if we don’t pay attention.

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Where did my trillion dollars go?!!
November 26, 2018 | Diandra Ramsammy

In the last couple of months, the unstoppable, must-own FAANG stocks are down 30% from their highs, and a total of over $1 trillion in market value vanished. What happened? Not long ago, Amazon, Apple and Alphabet (formerly known as Google) each flirted with or surpassed historic trillion-dollar market value thresholds. Where did all that money go?

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November 12, 2018 | François Sicart

In recent months, we have revisited the performances of some of our accounts as well as those of a few other portfolios managed by highly successful long-term investors. Our aim was to try and distillate some wisdom about how long-term performance is achieved and, especially, to dispel some widespread assumptions or preconceived ideas that may lead us to use less-than-optimal tools and techniques for achieving it.

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Zeromania. From a trillion to zero in 10 days?
August 21, 2018 | Diandra Ramsammy

Two great contemporary companies hit milestones recently. Apple reached an astronomical trillion-dollar market capitalization. Meanwhile, Facebook lost 120 billion in a day (comparable to the annual gross domestic product of Warren Buffett’s home state of Nebraska). That made me realize that at Facebook’s record free-fall speed, Apple would need less than 10 days to get to zero… we discuss how the difference between making and keeping money has never been more striking that it is today.

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What to do when nothing works?
May 16, 2018 | Diandra Ramsammy

After my recent TEDx Talk, a student asked me: “How do you invest when nothing works?” It’s such a good question that it deserves a longer answer than I could give that student on that day.

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Buy the dip, don’t buy the dip?
April 6, 2018 | Diandra Ramsammy

Over the last few decades, we’ve been conditioned to buy each market dip, but is this a good strategy today?

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The bull market crashed. Now what?
February 13, 2018 | Diandra Ramsammy

Over the last few days, we have seen about a 10% correction in major equity indices around the world. It definitely got everyone’s attention. Globally, estimated $5 trillion of paper wealth vanished in a matter of days. What happened though? No war, no impeachment, no lasting U.S. government shutdown either.

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February 7, 2018 | François Sicart

In a comment on my recent paper (Picking daisies under a fuming volcano, 11/30/2017) a European colleague with some affinity for our investment style nevertheless reminded me that “for us, asset managers, timing is of the essence” and that “clients will resent our missing another year of rising markets.” This warning was sent before the recent rout in the global stock markets, but it does not affect my strong views on the difference between short-term and long-term investing.

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When Bottom-Up Research Helps Top-Down Understanding
December 29, 2017 | Diandra Ramsammy

In our search for new ideas, we often come across companies we would never invest in. Steinhoff International is one of them. It’s a company we’ve encountered on a few occasions over the last year or two, and in each case, it triggered an immediate negative assessment. Nevertheless, there’s a story worth sharing here.

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Picking daisies under a fuming volcano
November 30, 2017 | François Sicart

In July 2007, near the top of big real estate bubble and only weeks before the Lehman Bros. bankruptcy and the onset of the Great Recession, Charles O. Prince III, then CEO of Citigroup, notoriously declared: “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” Today’s markets echo this past episode and remind us that contexts may change, but human nature does not.

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Sicart Associates Macro Views Presentation September 2017
October 2, 2017 | Diandra Ramsammy

Watching the high risk stock market, fragile growth, with limited pro-growth tools left available, we share some secrets to keeping a fortune in those perilous times.

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The most unusual bull market
September 26, 2017 | Diandra Ramsammy

Our current, highly durable bull market is characterized by three qualities: it might be the least exciting bull market in history, it’s been possibly one of the hardest to beat, and when it ends, the resultant crash will have been anticipated for months if not years.

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It’s easier to find someone to blame after the losses than to prepare for adversity
September 13, 2017 | François Sicart

“Shirtsleeves to shirtsleeves in three generations.” – The universality of the proverb above is the reason why, as investment advisers and family office to several generations, we view it as one of our primary missions to help our client families avoid the “curse of inherited wealth”. A good place to start is to try and avoid speculative bubbles and their fortune-destroying aftermaths.

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Life in a shrinking economy, a forgotten concept
August 21, 2017 | Diandra Ramsammy

With everything build for growth, with all assumptions hoping for a never-ending expansion, we take a contrarian view and consider a world with a shrinking economy. We see tailwinds of the last 40 years turning into headwinds ahead, and changing how we think about investing, and wealth preservation.

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How can we be wrong?
July 31, 2017 | Diandra Ramsammy

When we analyze an individual stock or the market as whole, we wonder how our conclusions can be wrong. Lately, we think the current market offers extremely low reward at an extremely high risk. How can it keep going up forever? Only if it finds buyers. Since the last financial crisis, debt-funded corporate share repurchases have amounted to almost 20% of market capitalization, and they offset net selling across most other investor types. Will anyone replace those buyers? And do they have the capital to do so?

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June 29, 2017 | François Sicart

The asset bull market of the last eight years has been quite comfortable for the 20% of the population who own investment portfolios. This is no time for complacency, however.

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The Emperor’s New Clothes – Understanding Today’s Financial World
June 23, 2017 | Diandra Ramsammy

Sometimes it seems that we learn all we need to know in life as children, and then somehow forget it all as adults. Recently, I had the pleasure of reading again Hans Christian Andersen’s tale – “The Emperor’s New Clothes”. Tricked by two enterprising weavers a vain emperor agrees to wear a suit made of invisible fabric. As you may remember, when the emperor chooses to parade his new attire, only a child in the crowd dares to say he is not wearing anything at all. Let us, for a moment, look at the financial world through the eyes of that child.

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How to save a fortune, and make money in these perilous times?
May 24, 2017 | Diandra Ramsammy

Our clients are families, and our job is to take good care of their fortunes for generations to come. We are playing the very long term game. We can wait. Today investing may feel like shopping in a crowded department store at the peak of pre-holiday frenzy, but we all know what happens after New Year’s Day — fewer shoppers, better selection, better prices. It only takes some patience.

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April 12, 2017 | Diandra Ramsammy

As much we avoid forecasting the market’s direction, we have reasons to believe the US stock market is too high. It’s not a question of “if” but “when,” “how much,” and “for how long” stock prices will drop. We believe that most asset prices could be subject to some of the biggest declines we have seen in decades, if not a century.

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