This note takes the long view. If one had bought the FTSE tobacco sector on 1st January 2000, 13 years ago, one would have made 51x more than investing in the FTSE IT Hardware sector. While it is perhaps unfair to judge the hardware sector's performance from the midst of the TMT bubble spotting long term trends can lead to spectacular returns. This note looks at sector performance over four time horizons. 1st January 2000, the end of TMT, which we take as January 2003, the market low, post the credit crunch (March 2009), and the 2013 leader board.
Walbrook is delighted to announce that Scott Evans has joined as Consulting Economist.Scott brings very wide ranging Academic and City experience to Walbrook. He started his career at as an academic economist working at the University of Oxford and the Institute of Fiscal Studies. Since entering The City, in 1995, Scott has worked for a number of major Investment Banks in senior roles, both in research and sales. Scott will bring his expertise to a number of fields notably equity and bond research.
Walbrook Economicshas published a paper, in conjunction with The Tax Payers Alliance, looking at the impact of Stamp Duty on the housing market. We conclude that the tax is counterproductive and needs urgent reform and make three proposals to improve the efficiency of the tax. Each of the proposals has been costed with the first two being revenue neutral at worst for the Treasury while markedly reducing the cost of the tax to house purchasers. We believe all three proposals would significantly enhance GDP growth. The link below outlines our proposal
Despite the recent warning, from a shift upwards in the long bond, we conclude that the risks to the housing market lie on the upside both in terms of valuations and transaction volumes. The kindling is the maintenance of cheap money, the spark is confidence fuelled by a greatly expanded monetary basis, strong demographics and a buoyant rental market. We see 6-8% growth in valuations in 2013 and 2014 and transaction volumes breaching 1 million for the first time since 2008. Please contact us for more details.
Ben Bernanke’s comments that the Fed is considering scaling back and ultimately ceasing all new QE, by summer 2014, have had a dramatic impact on both equity and bond markets. The end of ‘sugar rush,’ if end it is to be, has hit investors hard with 10 year gilts moving out by 60bp and the FTSE 100 giving up virtually all its gains since the start of the year. This note looks at the implications of Bernanke’s statement and argues what is ‘Good for America’ is unlikely to be copied here. Please contact us for a copy of the report.