This saying recently inspired me when uttered by a person near and dear to my heart. And no, it was not somebody famous, and more emphatically no!, these thoughts are not to be construed to be political in any way. That I feel I must stress this point is, to me, a sign of our times — the era which I have come to call that of the “politization” of everything. I indeed fear (even resent) that we appear to live in an age when just about everything ends up being about politics. …

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There…I said it! I broke the finance profession’s oath, and therefore committed a sacrilege, which may cause me to be expelled from the world of professional market analysts. However, I appear to still be standing. I strongly and repeatedly cautioned readers against joining the crowded chorus of short-sellers betting on a decline in Tesla stock (TSLA).

Long the most shorted stock in the US, if nothing else, TSLA has probably taught more than a few sellers that the market can indeed stay irrational longer than they can remain solvent…perhaps even much longer!

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Apple (AAPL) and Tesla (TSLA) are arguably among the best know companies, globally. Moreover, I continue to believe that the markets know essentially everything knowable, and are quite efficient, in the long run. Still, I also believe that — as well known as AAPL and TSLA are — their stocks are still rather misunderstood. The two companies sport the most heavily shorted stocks. In a short sale, investors sell the stock of a company which they do not actually own — in the hope that its price will drop so they can buy it more cheaply.

For those of you…

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Why have I not officially adopted ESG investing? ESG (acronym for environmental, social and governance) has been broadly embraced by the financial industry, which I criticize in my book Against #shortermism. Wall Street tends towards a ‘flavor-of-the-week’ marketing approach, touting ever-changing investment themes.

While a vast majority (if not all) of my stocks would qualify for high ESG scores, my investment approach has long emphasized a particularly extended time horizon. My book explains the merits of long-term-focused corporate cultures. It discusses the relevance of corporate governance, a subset of the all-important culture in my own investment process.

It also argues…

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An intensification of the debate as to the true efficiency of markets appears to currently be taking place. There is very little question that polarization abounds around the world these days. The acrimony between those of different opinions is arguably worse than it has been at least in a very long time (in generations, not only years).

Narrowing it back down to the belief in the efficiency of markets, those who disagree with the notion that markets are substantially efficient to cite multiple cases of its inefficiencies, excesses, negative externalities, etc. …

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My son Anthony went to a concert in Berlin Monday night. It was a shocking reminder for him of just how many Brits seem to live in Germany’s capital. “I wonder what would happen,” he mused rhetorically, “if all of them were compelled to leave Berlin after Brexit?” He, of course, does not believe this would happen. Germany has made it quite clear that it would not force British citizens to leave Germany, even in the event of a no-deal exit of the UK from the European Union (EU).

But this rhetorical question did get me to thinking. Along the…

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The liquidity curse is over!

An area that has occupied much of my thinking on equities recently has to do with the importance (or lack thereof) of the entities ultimately owning the equity in companies long-term. I am increasingly of the opinion that in the long run (where it really matters), it is actually not very important in whose ‘hands’ stock resides.

In a recent article, I explained why I believe that public stock market capitalization as a share of GDP is not a particularly relevant yardstick (especially at the national level). With the example of Saudi Aramco, I argued…

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I have long been bullish on German equities, and generally incorrectly so, as in our business, being too early is really no different from being plainly wrong. That said, and even as I have kept a very sanguine view on US blue-chip stocks, most people might be surprised to hear that the German DAX equity index has actually outperformed even the world-beating US S&P 500 index over the last year.

What might seem even more puzzling to some observers is that the German stock market has done this well even in the face of a deteriorating economy. Economic data to…

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In the long run, which is what really matters, I am increasingly convinced the world belongs to the self-confident. In yet another example of my thesis that there is such a thing as too much of a good thing, nonetheless, at the extreme, self-confidence also becomes a defect. I am always critical of any extreme position, and too much self-confidence (generally, a positive quality) can turn into hubristic narcissism.

The proverbial toggle (on/off) switch of global risk now in the hands of one man

The US president now is (almost indisputably) the most powerful person on earth. He now has…

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The question as to whether the current era of ever-diminishing yields is indeed the era of risk-less returns or return-less risks is an ever more important one. Many observers seem to equate the current environment of low yields to one of low investment returns. I have argued in previous articles and posts here that we are in an environment of low (and even negative) interest rates and thus yields, but that it has not been necessarily a period of low investment returns.

Indeed, even many institutional investors who have bought securities with a negative yield have been able to profit…

Claudio Brocado

Indep. GLOBAL portfolio mgr; former PM at $LM's Batterymarch,Fidelity,Putnam & RCM (now Allianz Global Investors).Crusader for #finlit & vs #shortermism. RT ≠ E

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