Sparrows Capital: Great expectations management

It is always hard to know what will happen with markets. We’re not in the business of offering predictions. Instead, like some of the successful sovereign and endowment funds whose approach we aspire to, we prefer to rely on the evidence.

But with underwhelming market returns - and with alpha becoming ever elusive - it is fair to say that we are likely to see a profoundly different investment environment over the coming years. Expectation management will become crucial. It is also fair to say that global markets look expensive in a historical context. They looked this way before the Covid-19 crisis. The correction we saw in the spring didn't seem to fully account for the world's financial and economic problems. Since then markets have rebounded back. The S&P 500 sits, at the time of writing, above its level at the beginni...