Category: Weekly Commentary

Weekly Market Commentary 27/06/22|STEM, K3C, REC| Wirecard: fraud and flawed

Bruce looks at Dan McCrum’s book on Wirecard and suggests that there are still a couple of details that don’t make sense about the fraud.  Plus upbeat releases from STEM, K3C and REC. The FTSE 100 recovered +1.2% to 7,101 last week. The Nasdaq100 and S&P500 were up 0.9% and flat over the last 5 […]

Weekly Market Commentary 20/06/22|DEVO, FDEV, BOTB| Remembering the days of Pali

Bruce reminisces about the demise of Pali, a firm he worked at in 2008 and looks at a couple of computer games companies (DEVO and FDEV) plus BOTB that reported last week.  Markets had a difficult week with the FTSE 100 was down -3% to 7,114. The S&P500 and Nasdaq100 both fell -9% as the […]

Weekly Market Commentary 13/06/22|ORPH, MRK, AO|Life sciences catch the software bug

Bruce looks at the spread of expressions like ‘platform’ and ‘flywheel’ from software companies to other sectors, including life sciences. Companies covered ORPH, MRK and AO. The FTSE 100 was down -1.5% in the last 5 days to 7,418. That’s better than the Nasdaq100 -4.8% and S&P500 down -3.8% over the same time frame. Brent […]

Weekly Market Commentary 30/05/22| AIM, KNOS, RNT, MORE| Analysing the de-rating

Bruce looks at how the market has de-rated on a price to sales metric since Q4 last year. But there are still 111 AIM shares trading on more than 10x revenue.  Companies this week KNOS, MORE and RTN. The FTSE 100 rose +2.5% to 7569 last week. The S&P500 +4% and the Nasdaq100 +3.4% both […]

Weekly Market Commentary 23/05/22| OWIL, EQLS, FUTR, MONY| The value of amnesia

Bruce ponders the ingredients required to precipitate a systemic crisis, and why memories are so short in financial services.     The FTSE 100 was flat at 7413 over the last 5 days. US markets had a more difficult week with the S&P500 -0.75% and Nasdaq100 -0.60%. The S&P500 is approaching bear market territory down […]

Weekly Market Commentary 16/05/22 |WATR, CCT, TET| Come on Eileen

With the BoE now suggesting inflation peaks at 10% later this year, Bruce goes back to 1982 when Dexys Midnight Runners were topping the charts to compare household indebtedness then v now. Stocks covered WATR, CCT and TET. The FTSE 100 fell -1.3% to 7286 last week. The Nasdaq100 was down -7% and the S&P500 […]

Weekly Market Commentary 09/05/22 |LUCE, RCH, SFOR, LTG| Lazy formulas

Bruce looks at how successful formulas, if copied without thought, can become lazy thinking.  He looks at a profit warnings from last week LUCE and RCH.  Plus a couple of acquisitive “roll-ups” which the auditors delayed signing off the results: SFOR and LTG. The FTSE was down -0.9% at to 7,443 last week. The US […]

Weekly Market Commentary 03/05/22 |ZOO, SWG, SMV| An infinite puzzle with no edge

Bruce discusses the concept of “edge” – now that we all have access to the same information, how can anyone enjoy an advantage? Companies covered this week ZOO, SWG, SMV. The FTSE 100 was flat at 7,516 over the last week. The Nasdaq100 and S&P500 were down -2% and -2.4% over the same time period. […]

Weekly Market Commentary 25/04/22 |NFLX, CBOX, SOLI, CAPD| Lion King v Tiger King

Bruce questions whether the value of intangible assets on Netflix’s balance sheet are of the same character as Disney’s intangible assets.  Plus a mix of UK stocks that reported last week CBOX, SOLI and CAPD. The FTSE 100 was down -0.2% to 7,563 last week. The Nasdaq100 was down -3.5% as Netflix was the latest […]

Weekly Market Commentary 19/04/22 |ARKK, PZC, MRK, AGFX | Growth Stocks and the St Petersburg Paradox

Bruce digs out an obscure 1957 paper on growth investing, that Warren Buffett refers to when answering a shareholder question at his AGM and applies the thinking to the ARKK Innovation ETF.  Plus PZC, MRK and AGFX trading updates last week. The FTSE 100 closed ahead of the Easter weekend at just above 7,600, that’s […]

Weekly Market Commentary 11/04/22 |DEVO, IGP, AFM, ELIZX | Clubs money can’t buy

This week Bruce takes a look at Elon Musk’s Twitter activism and what the London Stock Exchange might learn from Musk’s other activities. Companies covered computer game publisher DEVO, online identity company IGP and management consultancies AFM and ELIX. The FTSE 100 was 7,619 +1.1% last week. The UK index of blue chips has been […]

Weekly Market Commentary 04/04/22 | TND, BUR, EQLS | Diversification through time

Bruce looks at how pound-cost-averaging can help when the investing environment is particularly uncertain or the relationship between asset classes breaks down.  Companies covered BUR, TND and EQLS. The FTSE 100 was up +0.8% last week to 7535. The Russian stock market was up +28%, after it re-opened following it being closed for a month, […]

Weekly Market Commentary 28/03/22 | SPSY, FNTL, JDG | Engines that move markets

Bruce suggests that strong equity markets may be reflecting asset class rotation out of government bonds, rather than optimism about the situation in Ukraine.  Companies covered this week SPSY, FNTL, JDG The FTSE was up less than 1% to 7,492 last week. The Nasdaq100 and S&P500 were up +2.4% and 1.3% respectively. US Government bonds […]

Weekly Market Commentary 21/03/22 | FNX, TCAP, LIT | Off Ramps

Based on conversations with a first hand source, Bruce believes the narrative about Ukraine may be too optimistic.  But would be very happy to be proved wrong in the next week or two if a cease fire is signed AND upheld.  Companies covered Fonix Mobile PLC, TP ICAP Group PLC and Litigation Capital Management. The […]

Weekly Market Commentary 14/03/22 | CKN, BGO, FCH | Frameworks for resolution

Bruce remains in risk averse mode, keeping an open mind and updating beliefs to see how the conflict in Ukraine might resolve.  He looks at Clarkson, which should benefit from high commodity prices, and also Bango and Funding Circle. The FTSE 100 was up +2.7% to 7,178, having had a very volatile week. The S&P […]

Weekly Market Commentary 07/03/22 | CLX, NICL, SPA | The rich trade of the Black Sea and beyond

Bruce looks at the root causes of the conflict in Ukraine, and outlines two scenarios that the Bank of Georgia research team (who know a thing or two about Russian invasions) have discussed.  Plus 3 companies reporting last week.  “All civil wars are dynastic wars, my lord King; all overseas wars are trade wars…Troy commanded […]

Weekly Market Commentary 28/02/22 | NWG, LLOY, BARC, HSBA | Banking on Price to Book

Bruce looks at UK banks’ FY Dec 2021 results and draws out some themes on revenue, profitability, “one off items”, competition, interest rates and price / book valuation.  The FTSE 100 sold off sharply last week down -4% on Thursday last week. US markets were more sanguine with the S&P500 down -1.4% and the Nasdaq100 […]

Weekly Market Commentary 21/02/22 |STAN, HEIQ, THG, FLTA, FRAN| Banking on the metaverse

Bruce remembers a former colleague, who preferred face to face interactions and was rarely at his desk during the afternoon (clue: he wasn’t in the metaverse either).  Plus comments on Standard Chartered, HeiQ and Franchise Brand’s bid for Filta. The FTSE was down -1.5% to 7,543 last week. The Nasdaq100 was down -0.6% and the […]

Weekly Market Commentary 14/02/22 |PZC, K3C, SOLI| Never says “never banks” again?

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Bruce suggests that while long term “expensive quality” investments have become increasingly popular as discount rates have fallen, a natural hedge for such a portfolio is bank shares, which could now benefit as rates rise with inflation. The FTSE 100 was up +2% to 7,617 last week. The S&P500 and Nasdaq100 were flat. The real […]

Weekly Market Commentary 07/02/22 |RSW, JHD, JOUL| Quality can’t be quantified…

While he is away skiing, Bruce asked ex-fund manager (with 16 years experience) and private Investor Jamie Ward to manage his weekly commentary this week. Jamie looks at the best things about being a private investor compared to being in the Square Mile as well as results from three companies that at some points in […]

Weekly Market Commentary 31/01/22 |CBOX, DLAR, CNS|: All I want to know is…

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There’s considerable institutional pressure on financial analysts to be positive, but often the most valuable information is negative: what to avoid.  Bruce looks at a couple of case studies that reported last week. The FTSE 100 was flat last week, at 7,497. Matt Moulding’s THG fell to 134p, down -10% in the week and now […]

Weekly Commentary 24/01/22: Market wobbly

Bruce looks at Terry Smith’s investor letter, admires his simple process. SharePad is also great research tool for assessing funds like Fundsmith, not just individual companies. Plus 3 companies that reported last week. The FTSE 100 was 7,521, down -0.3% last week. The US markets have sold off much harder last week, with the S&P500 […]

Weekly Commentary 17/01/22: When you’re underwater…

Bruce looks at risk management, and how to react to the discomfort of your positions being underwater. Plus 3 stocks that updated on progress last week: Equals, Franchise Brands and Frenkel Topping. The FTSE 100 was up +1% to 7554, driven by banks and oil companies which have enjoyed a strong start to 2022 (BP […]

Weekly Commentary 29/12/21: Performance and distributions

Bruce assess his performance for 2021, and notes that he would have been better off doing nothing. He also looks at the skewed return distribution of returns of AIM shares, plus 2 companies that reported positive news last week. The FTSE 100 reached 7,400 on Christmas Eve, up +14% this year, versus the AIM All […]

Weekly Commentary 13/12/21: Epicycles and shared illusion

The FTSE 100 was up +2.7% to 7,321, recovering last week as early news out of South Africa suggested that fewer patients with the new variant were on ventilators. Both the Nasdaq100 and S&P500 were up +2.8%. The US 10y Govt bond yield rose from 1.35% to 1.52% (ie Government bonds sold off as financial […]

Weekly Commentary 1/11/21: The shopping trolley problem

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The FTSE 100 was flat last week, drifting around 7,226. Nasdaq and the S&P500 did better, up +2.8% and +1.1% respectively, following strong results from Google and Microsoft. Apple and Amazon signalled that disruption and costs from supplying customers with physical products were rising. Facebook became Meta. Name changes should not affect share prices, but […]

Weekly Commentary 18/10/21: The Eagle has Crash Landed

With the FTSE 100 reaching 7235 last week, the index finally seems to have broken out of the trading range that it has occupied since May. The index’s all time high is 7,903 reached in 2018. ITM, the hydrogen company raised £250m through an over-subscribed placing at a 16% discount. There’s still plenty to worry […]

Weekly Commentary 20/09/21: Entities multiplied beyond necessity?

UK and US markets remain quiet, with the FTSE 100 at 7,013, struggling to keep its nose just above 7,000 last week. There continue to be spikes and drops in some commodities; earlier this year it was Rhodium hitting $25,000 an ounce, now Uranium is up +48% in the last 3 months, while Iron Ore […]

Weekly Commentary 09/08/21: What $16 trillion of negative yields are signalling

Last week the FTSE 100 was up +1.1% to 7,111, Nasdaq was up 1.5% to 15,181, outperforming the S&P 500, up +0.8% to 4,429. Both the Hang Seng index in Hong Kong and the FTSE China 50 Index were up less than 1% last week. The US 10Y bond yield continued to fall to 1.19% […]

Weekly Commentary 02/08/21: Credit and Contagion

The FTSE 100 bobbled about just above 7,000 last week. Nasdaq 100 was down less than half a percent, as strong results from Alphabet, Microsoft and Apple all beat analyst forecasts on the top line. This was offset somewhat by Amazon, which reported sales growth slowing as lockdown measures eased. Maybe Jeff Bezos has timed […]

Weekly Commentary 19/07/21: $7trillion price of stability

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The Bank of England released its twice yearly Financial Stability Report last week. The report says that UK bank balance sheets are in much better shape than the 2007-8 crisis and they expect impairments in 2021 to be lower than the £22bn credit losses taken last year. The “guardrails” against shareholder dividends have now been […]

Weekly Commentary 31/05/21: Operating leverage

The FTSE was quiet remaining just above 7,000 through the week. Looking at the five best performing stocks since the start of the year (Ashstead +53%, Entain +47%, Evraz +38%, Glencore +38%, Lloyds +37%) and the worst five (Tesco -24%, Just Eat -23%, Fresnillo -19%, London Stock Exchange -18%, Ocado -16%) it’s hard to discern […]

Weekly Commentary: 22/02/21 – All Aboard for Mu Mu Land

At midnight, on 1st January this year, the K.L.F. released their back catalogue of music (hits such as 3AM Eternal, Justified and Ancient, Last Train to Trancentral) on Spotify and uploaded their old videos to YouTube. This was their first activity as a band since 1992, when they announced they were leaving the music industry […]

Weekly Commentary: 18/01/21 – Reincarnation as the bond market

In the early days of a new Democrat presidency, the President’s campaign manager observed that: “I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a 0.400 baseball hitter. But now I want to come back as the bond market. You can intimidate anybody.” The […]

Weekly Commentary: 14/12/20 – Taxes steering behaviour?

After a strong November and start of December the FTSE 100 was largely unchanged this week at 6566. More broadly, the signs of a cyclical recovery are evident: oil price rose through $50 a barrel and copper and other industrial commodities have also been strong. Airbnb IPO’ed with the shares closing on their first day […]

Weekly Commentary: 07/12/20 – Vaccine inoculating risk tolerance

The best performing FTSE 100 stock last week was Rolls Royce, up 19%. The worst was Unilever down 6.5%, which suggests expectations of a vaccine are inoculating investors against risk. On Nasdaq, the vaccine stock Moderna, was the best performing up 44% in the last 5 days, while Zoom was the second worst performing down […]

Weekly Commentary: 30/11/20 – The platform bandwagon rolls on

FTSE weakened slightly to 6300 in the second half of last week, but the bounce of former “Covid losers” continued with Rolls Royce, Glencore, Shell and BP all up 8% in the last 5 days. Nasdaq continued to rise to 12152 and Tesla’s value exceeded half a trillion dollars. airbnb IPO Last week airbnb filed […]

Weekly Commentary: 23/11/20 – Expectations rising

We are beginning to see companies operating in the “real” economy announce raised guidance. Somero (exceeding previous revenue guidance by +7%), but also Headlam (materially ahead), Acesso (comfortably ahead). Saga share price was also up +57% during the week. The FTSE 100 is currently 6378, which is the same level as early March this year. […]

Weekly Commentary: 09/11/20 – Study silence to learn the music

The US Presidential election turned out to be closer than most people expected. Nasdaq up almost +10% over the week to 12078. Tech stocks reacted well to the uncertainty, but so did 10 year US Bond yields, which initially jumped to 0.9% before falling back to 0.78%. I’m not sure if you’d predicted the result, […]

Weekly Commentary: 02/11/20 – Insiders selling at the top?

Last week markets sold off into the rising cases of Covid. The FTSE 100 fell 5% last week to 5561. Large UK banks HSBC and NatWest reported encouraging results, although the sector remained unloved. Directors selling Given the strength of the market’s rally over the last 6 months, and then last week’s sell off, I […]

Weekly Commentary: 19/10/20 – On network effects and fads

“Fad companies are companies with good business models or good products. So, why would we be interested in shorting a company that has a good product? Because of the threat it presents to others and their likely response to that threat. For example, Netflix had a terrific idea of renting DVDs through the mail, which […]

Weekly Commentary: 12/10/20 – On content, distribution and kurtosis

Last week the FTSE recovered to just over 6000. The (perhaps inappropriately named) Bond film No Time to Die, was postponed until next year by its Hollywood studio, MGM, which has left cinemas in trouble. Cineworld is on the brink, a victim of an overly leveraged balance sheet but no product to distribute. Up until […]

Weekly Commentary: 05/10/20 – On uncertainty and confidence

Last week Andy Haldane at the Bank of England gave an interesting speech on “Economic Anxiety” noting that pessimism can be as contagious as the disease. Haldane is most famous for his “Dog and the Frisbee” speech, which he co-wrote with the famous psychologist Gerd Gigarenzer in 2012. Catching a frisbee is difficult; theoretically it […]

Weekly Commentary: 28/09/20 – Beginner’s mind and Buy and Build

Markets sold off last week as virus case rises rose (FTSE 100 fell to below 5800 before recovering slightly later in the week, Nasdaq down 4% to 10,800). The virus itself seems reasonably predictable, everyone has been expecting cases to rise as summer turns to autumn. What hasn’t been predictable is Government responses around the […]

Weekly Commentary: 21/09/20 – The long journey to exoneration

The FTSE 100 just about held its level above 6000 last week. Last week was Chilean Independence Day. It is a little known footnote in history that Lord Cochrane, who was involved in the great Stock Exchange scam of 1814 (accused of starting rumours of Napoleon’s death via the Admiralty’s semaphore telegraph) helped not one, […]

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