US bonds just keep on rising despite the US Fed again insisting this week that it doesn’t see inflation becoming a problem. A continuation in this vein spells bad news for emerging markets’ currencies and assets, with bonds likely to be worst hit by an erosion of their yield premiums in wha.
In 1979, Daniel Kahneman and Amos Tversky outlined prospect theory, which identifies economic behaviours that are inconsistent with rational decision making. Their theoretical take on probabilities and expectations could well prove relevant today in assessing the likelihood of historically low government bond yields being subject to potentially asymmetric outcomes.
One of the most significant insights from their theory is that people exhibit a significant aversion to losses when making choices between risky outcomes, no matter how small the stakes. Kahneman and Tversky found that a loss has about
two and a half times the “utility impact” of a gain of the same magnitude. In other words, people feel significantly worse about losses of a given magnitude than they feel good about a gain of similar magnitude.
MONEYWEB
app instead?
Bastian Teichgreeber takes over from Guy Toms, who moves into the role of strategist.
By Patrick Cairns, Citywire
15 Feb 2021 12:30
Prescient Investment Management has announced a number of significant personnel changes within its investment team.
The most notable is that co-founder Guy Toms will move out of the CIO role to take up the position as strategist. He will be replaced by Bastian Teichgreeber.
Toms had previously served as chief strategist at the firm, but took over as CIO in 2018.
âWhat we want to get out of Guy is the ability for him to focus on investments,â said Teichgreeber. âHe is not moving out. The opposite is the case.