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This is the home of Hawksmoor's Research Department. Here you will find our latest articles, blogs, and presentations.

INNOVATION

Innovation is a weekly financial markets blog written by Jim Wood-Smith, CIO Private Clients.
22
AUG
KID CHARLEMAGNE
The concept of balance, or duality, appears throughout history. Religions teach of good and evil, Daoist philosophy of yin and yang, Buddhism of the middle way, Isaac Newton of equal and opposite forces. After last weeks column, I was outed as a bear; it is only fair and proper therefore that today I should lay out the bull case. And as Sid James almost said: puer, O puer, O puer, is it bullish.

15
AUG
THE MEADOW PIPITS
A very happy Monday to everyone on this glorious August morning. The blue skies though appear slightly paled by the strength of the weekend's sun; and still criss-crossed by the vapour trails of those whose quest for foreign sunshine is undimmed by the sinking of the pound. 'Summer's lease hath all too short a date.'

08
AUG
PRISONERS OF OUR OWN DEVICE
A question of digestion to start: if one has one's cake and eats it, is emesis inevitable? Markets are not so much nibbling on a light Victoria sponge with orange water, but are rather doing a passable impression of the green blob in Ghostbusters working its way through Patisserie Valerie's master warehouse. This is gratuitous gluttony. It cannot be right that equity markets go up on both rising and falling interest rates. But that is what is happening. It seems ridiculously curmudgeonly to say so on this glorious August Monday morning, but markets are upsetting my disposition.

01
AUG
THE ART OF ASKING QUESTIONS
A warm welcome to August. Except that it is a bit of a dark and watery start to the holiday month here in the West Country. It is the time when the country tilts, as the bottom left becomes weighed down by the Winnebagos, the Dormobiles, the family sets of mountain bikes and lots of people in burgundy shorts with Ralf Lauren jumpers over their shoulders. But while Dave and Sam can giggle away at their honours list from their body boards at Polzeath, the world keeps on turning. And at quite a pace too. We are in for a fun month.

25
JUL
AND THE BEAT GOES ON
The weekend's brouhaha at Dover hints that holidaying in Europe may not have become less appealing after all. Equally the 12 mile queues on the A30 at Temple on Saturday might suggest that space on the beach at Mawgan Porth is also going to be at a premium for a few weeks. Almost everything we see tells us that life after Brexit bears a strong similarity to life before it.

18
JUL
DO YOU REMEMBER
Many blue moons ago I used to help teach presentation and meetings skills. Part of this was how to conduct successful business pitches. In keeping with the spirit that it is usually best to ask someone who knows what they are doing, one of the firms serial trustee clients very helpfully provided us with a list of the top ten things not to do when pitching to trustees. Very high on the list was never to make sporting analogies

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THEMATIC RESEARCH

A collection of "bite-sized" research articles exploring a variety of investment themes and opportunities.

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JARGON BUSTING

The investment world loves a flutter of jargon. It makes commentators sound ever so clever.
Yet behind this flamboyant lexicon are often some fairly simple, easy-to-grasp concepts.
Here is a collection of articles seeking to extract the crux from the complex, the idea from the over-engineered.
Alpha & Beta Behavioural Finance Bull & Bear Markets
Contango & Backwardation Contingent Convertible Bonds Correlation
Cyclically Adjusted P/E Ratio Diversification Duration
Enterprise Value Gearing Hedging
High Frequency Trading P/E vs. P/B Put & Call Options
Risk Share Buybacks Sharpe Ratios
Short Selling / Stock Lending Smart Beta Structured Products
Tracking Error Value at Risk

UNDERNEATH THE ARCHES

Underneath the Arches is our quarterly newsletter for private clients, in which we attempt to explain what has happened in investment markets in recent months and to lay out our expectations for the future.
Q3
2016
NEVER GOING TO STOP THE RAIN BY COMPLAINING
We make no apologies for this quarter's newsletter being centred on the aftermath of the Referendum. It is, at least for financial markets, the only game in town. It is also ludicrously complicated by no-one knowing what the rules of the game are, or even who is playing. The clock cannot be turned back; in the absence of a General Election before the end of the year, the United Kingdom is going to leave the European Union. We must all get on and deal with it.

Q2
2016
GET RIGHT BACK TO WHERE WE STARTED FROM
Blink and you missed it. Stock markets have performed typically erratically over the first three months of 2016. The unexpected situation is that everything is broadly as it was at the start of the year; it is just that it has been a nerve-jangling roller-coaster to get here. We regularly warn of the perils of information overload - television, newspapers, radio, the internet and smart telephones all promise daily answers to the financial markets but provide only dangerous shortterm noise. To succumb to the temptation to listen to this inevitably means that one becomes entangled in the short-term randomness of the market. To do so is to run with the herd, only at the rear. And the view of the backsides of a herd of bulls or a sloth of bears is not a jolly one.

Q1
2016
COLD TURKEY
A very Happy New Year to all our readers. We extend the warmest of Hawksmoor welcomes, especially for those joining us for the first time. Underneath the Arches is our quarterly newsletter, in which we attempt to explain what has happened in investment markets in recent months and to lay out our expectations for the future (the former inevitably tends to be the excuses for why we were deficient in the latter).

Q4
2015
THE BEAR IN THE CHINA SHOP
No Chinese proverb is so clichéd as the warning to be careful what one wishes for. Three months ago we had welcomed the nascent upset in global equity markets as a harbinger of better valuation and therefore greater sustainability. As we head into the autumn, equity markets are undoubtedly more attractively priced than for a considerable time. The problem is that there are a number of reliable signals saying that these valuations are likely to become even better yet. More succinctly, the post-2009 bull market has run its course.

Q3
2015
WELCOME THE PARTY POOPER
One of the greatest dreads of any stock market commentator is 'things'. These things have a nasty habit of happening around the end of each quarter. Our reflections on the past three months and our crystal ball for the second half of the year are thus heavily clouded by Greece.

Q2
2015
SLOW DONT GO SO FAST
It is one of the most important attributes of a successful investor to be able to separate issues of long-term significance from temporary irrelevances. The first three months of 2015 have provided more distractions than usual but the overall positive path for markets has not changed. It feels uneasy writing this in the early stages of an increasingly acrimonious general election campaign but our confidence that 2015 will be a good year for our portfolios is undiminished.

Q1
2015
THE OIL OPPORTUNITY
The last weeks of the year are traditionally a happy time for stock markets. They are for reflection on the year that has passed and to look forward to the one ahead with renewed optimism. Stocks of the year are tipped, worthy comment is written about where in the world the smart money is moving to and everyone anticipates better times ahead. For good reason December 2014 was quite different.

Q4
2014
RUNNING ON THE SPOT
'Progress' is a noun that is rarely used without an accompanying adjective. It can be as simple as 'some', but is usually a measure of speed or comfort. It can thus be 'rapid', 'slow', 'good' and even 'painful'. No matter how it is qualified, however, its use always means that an improvement has been made. We therefore struggle to argue with any conviction that investment markets have made progress over the summer months.

Q3
2014
STEADY AS SHE GOES
It is fortunate that nowhere in the rules of investment does it say that stock markets have to be exciting. Life would be a great deal easier for financial scribes if there were a thrilling story to be told every few months. Of how share prices have been a roller-coaster that only the most astute and agile could possibly have navigated. Most often there is no great drama, nor world-threatening economic crisis, nor South Sea Bubble, just a normal six months in which nothing really happens. As much as we would love to report on how our brilliance at Hawksmoor has saved the day, or how we have ridden the crest of a wave only to sell everything at the very peak of the market, 2014 has been nothing of the sort. It has been refreshingly dull and this reassures us immensely.

ABOUT US

Hawksmoor Research

Hawksmoor specializes in providing high quality discretionary portfolio management. The Research Department, supported by Hawksmoor's Fund Management Team, oversees our investment process and the stocks, bonds and funds that we include in our portfolios.

It is a virtue of our size that we do not have to have an off-the-shelf view on every investment in the universe. Our process is highly targeted: we are snipers rather than having analytical armies. Instead we concentrate our efforts on identifying the very best stocks, bonds and funds for our portfolios.

Nor do we worry about the composition of stock market indices, believing that size is no guarantee of quality, and we like to think thematically rather than over-analysing shorter-term market noise. Our focus is on blending quality, value and momentum, to identify attractive investments for our clients.

To find out more about Hawksmoor, please click here.

JIM WOOD-SMITH
CIO Private Clients


IAN WOOLLEY, CFA
Senior Investment Analyst

Health Warning / Disclaimer

This document should not be interpreted as investment advice for which you should consult your independent financial adviser. The information and opinions it contains have been compiled or arrived at from sources believed to be reliable at the time and are given in good faith, but no representation is made as to their accuracy, completeness or correctness. Any opinion expressed, whether in general or both on the performance of individual securities and in a wider economic context, represents the views of Hawksmoor at the time of preparation. They are subject to change. Past performance is not a guide to future performance.

Hawksmoor Investment Management Limited is authorised and regulated by the Financial Conduct Authority, is registered in England No. 472929, and its registered office is at 2nd Floor, Stratus House, Emperors way, Exeter Business Park, Exeter EX1 3QS.


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