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In 1789, Benjamin Franklin famously wrote: ‘in this world nothing can be said to be certain, except death and taxes’. Martin Vaughan, Senior Partner of Clear Capital Management LLP (Clear CM), suggests there’s a third certainty - that when an investment is made for the medium to longer term, the value of that investment WILL go down as well as up.
Radiohead famously included a song called ‘No Surprises’ on their OK Computer album. Over the past few weeks we have seen some stock market turmoil with a number of the leading financial indices falling by over 5%.
Any self-deprecating virtuoso violinist will tell you that they alone could never rival the completeness of an orchestra. Martin vaughan, senior partner of clear capital management llp (clear cm), believes those working in modern financial services must also look to combine with others for true success.
When kipling wrote “if you can keep your head when all about you are losing theirs…”, it’s unlikely he was referring to the financial markets. Yet it is nevertheless an appropriate adage for recent reactions to global stock market activity.
When Santa visited us this time last year, he must have thought we’d been very good boys and girls – as he’s been extraordinarily kind to us from an investment perspective for the past 12 months. So, will 2018 be more of the same? Or should we prepare for the worst and ask Ebenezer Scrooge to look after the books for a while?
At Clear CM we believe that investment research is akin to buying a home. Most people would not buy a house without first visiting the property. While there, they might even test the bathroom taps or lift up carpets looking for tell-tale signs of damp, and they will possibly quiz the current owner in an effort to discover what the neighbours are really like.
When Clear CM was established, we deliberately chose a name that reflected clarity and transparency. We wanted to entirely lift the shadow of mystery that can so often shroud the industry. As the popularity of our portfolios grows, we wanted to provide an insight into our current thinking and some of the themes that have shaped our recent investment thoughts and decisions. We hope you find this commentary useful.
I have just finished reading a book called The Financier by Theodore Dreiser. It is about a man called Frank Cowperwood who becomes a stockbroker and starts by investing for himself, is successful and then builds a company which invests other people’s money. The company performs well until a single event which is out of his hands and totally unrelated to what he does causes him to eventually become bankrupt.