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The Mirandolan by Joseph Noko – On Capital Cycles, the Macro Picture and Business Valuations.

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The Asset Growth Effect and Future S&P 500 Returns

Sticky
2020-08-06
On: August 6, 2020

Equity preference by investors as seen through the asset growth effect is a strong predictor of future stock market returns. In examining the capital cycle of equity preference, we can see a very strong correlation with 10-year future returns in the S&P 500. The outlook at present suggests single-digit returns in the next decade. By Joseph Noko   *** Capital Cycles and the Asset Growth Effect  High returns on invested capital (ROIC) invite capital and new investment, bidding up asset prices to euphoric valuations while eventually creating excess capacity, plunging economic earnings below the cost of capital, sending a market lurching forward to what Joseph SchumpeterRead More →

“The Deficit Myth” by Stephanie Kelton: A Review

Sticky
2020-07-02
On: July 2, 2020

*** If there is a “deficit myth”, Stephanie Kelton is bent on exposing it. There is a puritanical shame that accompanies talk of a country’s deficit, the putrid stench of moral decay wafts through the air, driving governments to violent self-lacerations by way of swingeing spending cuts. Kelton’s book, The Deficit Myth, is a work of popular economics whose mission is to introduce the public to modern monetary theory (MMT) and lift the shame around the deficit myth through a paradigm shift in the way the public thinks about it, while offering up a promise of a Prometheus unbound: a government whose fiscal space andRead More →

On Learning: How to Rapidly Acquire Skills and Knowledge

Sticky
2020-06-28
On: June 28, 2020

In a world awash with information, where the possession of a broad range of skills and knowledge gives the investor and businessperson an edge in the marketplace, knowing how to learn is perhaps the most neglected of skills. This is your ultimate guide to learning hard skills and mastering knowledge quickly. Read More →

Zoom: A Wonderful Company at Terrible Price

2021-01-15
On: January 15, 2021

This article was originally published in my newsletter, The Mirandolan by Joseph Noko, on Substack. My goal as an investor is to buy a business that, firstly, can earn good returns on invested capital; secondly, is in a capital cycle that is favourable to the pursuit of economic profits, which is to say, it operates in an industry in which either capital is exiting in ways that allow for consolidation of that industry in its favour, or, where the competitive landscape is such that there are robust barriers to entry that protect the business’ ability to earn economic profits; thirdly, is viewed with unreasonable pessimismRead More →

Some Thoughts on Extreme Events and Uncertainty

2020-06-26
On: June 26, 2020

The world is riddled with randomness and uncertainty, our plans prone to disruption by extreme events, this post explores how the investor can navigate uncertainty and think about extreme events.Read More →

Recent Posts

  • Zoom: A Wonderful Company at Terrible Price
  • The Asset Growth Effect and Future S&P 500 Returns
  • “The Deficit Myth” by Stephanie Kelton: A Review
  • On Learning: How to Rapidly Acquire Skills and Knowledge
  • Some Thoughts on Extreme Events and Uncertainty

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The Mirandolan’s newsletter looks at how changes in the capital cycle within an industry will affect future returns or how the competitive position of a company will change according to changes in the industry’s supply side. You can sign up for it here.

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