The markets are fascinating beasts, in fact in some ways too fascinating and, in extreme cases, even addictive. They play the emotional strings of greed and ‘fear of missing out’ (FOMO), releasing strong hormones into our bodies. No wonder then that talking about the markets and the contemporary world often takes up the bulk of our time when managing our finances.
A ‘Story Stock’ refers to shares of a company whose value is driven by expectations of outperformance, usually due to the commercial application of a new technology and intense media coverage, rather than a company’s underlying fundamental value, such as its earnings, assets, and profitability.
Investment returns have two parts: the expected return and the unexpected return. The expected return is the best guess of what will happen based on all the information currently available. The unexpected return is the surprise, the difference between what does happen and what was expected.
Back in January 2009, when MASECO was only 6 months old, our “Year in Review” article was named Annus Horribilis and covered the 2008 Global Financial Crisis. From a humanitarian and economic perspective, 2020 will be also be remembered as an ‘Annus Horribilis’ and will go down in the record books as one of the strangest years in memory.
It is easy to become fixated by the latest headlines and attempt to predict the market's next move but this can lead to 'analysis paralysis'.