Han Dieperink

It is striking how few investors dare to bet their cards on the Magnificent Seven before 2024. All sorts of things are being tipped, but the Magnificent Seven have to suffer.

The hype is over and they could fall apart at any moment. It is either no good or it is no good. For an investor who dares to think contrair, it is an interesting premise.  Here are the top 10 misconceptions surrounding the Magnificent Seven.

In a thought-provoking piece from May 2018, I penned a commentary here titled ‘Make America Great Again’, promptly re-titled by the editor to ‘Rabobank: Trump is good for economy and stock market’. Reflecting on it now, I am mostly financially appreciative. To clarify, today’s discourse is not about Amazonian deforestation but Donald Trump once more.

Ever since the inception of the European Green Deal, ESG (Environmental, Social, and Governance) has been mired in a tangle of compromises, featuring arbitrary categories underpinned by a fundamentally incoherent, and likely counterproductive, concept.

US 10-year yields have risen above 5 per cent. As a result, earnings yield - the inverse of the P/E ratio - has fallen below bond yields for the first time this century. With that, equities look vulnerable. The days of TINA are over for good, there is an alternative again and that is bonds.

In 1973, during Yom Kippur, Israel found itself under siege from countries including Syria, Egypt, Morocco, Iraq, Algeria, Kuwait, and Saudi Arabia. This conflict led to the first oil crisis, causing oil prices to triple in a short span, marking a significant shift in Western economic growth post-World War II.

The private debt market’s robust growth is largely attributed to tighter regulations imposed on commercial banks. A recent US banking crisis, coupled with stricter Basel IV norms, propels this surge. Additionally, tight monetary policies are leading to a notable spike in fees, particularly in relation to risk. Consequently, a promising asset class has quickly taken shape.

Artificial intelligence is eminently an application for investors. Especially in a complex data-rich environment with a lot of uncertainty, artificial intelligence thrives.

Since 2014, the kickback fee, also known as distribution fee, has been abolished in the Netherlands. Prior to this, asset managers would continuously pay a fee to distributors whenever investments were made in the asset manager’s funds.

There has been a clear shift from public markets to private markets. Private markets are no longer an opportunistic satellite, but are now the core of the investment portfolio. 

During my student days in the late 1980s, I was one of the few students who had access to an Apple II computer. A big difference between Apple’s word processor then and the average word processor on a PC was WYSIWYG, acronym for What You See Is What You Get. On the screen, the document was visible just as it was printed. Even then, Apple was way ahead of the competition.