By
Borsgade
In his recent letter to shareholders, Christopher Davis highlights that the era of near-zero interest rates, which began after the 2008 financial crisis, ended in March 2022 when the Federal Reserve started raising rates. This shift marks a return to a more normal economic environment, though it may bring volatility and disruptions.
Christopher expresses optimism about long-term progress and innovation, despite current challenges and pessimism and has positioned the portfolio around four main themes:
Here are the key takeaways:
From 2008-2022, artificially suppressed interest rates created a period of unprecedented economic and market distortion. Throughout that period, fundamental investment analysis—which rests on discounted present value, cost of capital and risk management—became largely irrelevant. Valuation discipline fell out of favor and the market increasingly rewarded momentum and speculation.
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Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk
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