PETRA: Our proprietary framework for analysing risk-adjusted returns across asset classes
Concentrated and yet Diversified: Bonds are contractual agreements by companies to borrow money from investors, pay interest on that money and return it at a specified date in the future.
The Tellsons investment team aims to look across many years to generate stable returns from the combination of both bond and equity investments. The horizon we find useful is sometimes referred to as ‘the business cycle’ or economic cycle.
We wanted to revisit this theme which we first commented on last November (2013). At the time, we cited an historically expensive valuation of the S&P500 on the measure of a cyclically-adjusted Price/Earnings of 24 times, (CAPE as devised by Robert J. Shiller, Professor of Economics at Yale University).
November 2013: Earnings per share of the S&P 500 in the US grew less than a real 2% for the 12 months to June driven by sales growth of a mere 1.1% in real terms. The long term historical average for the EPS growth of the US market (12 month rolling) has been nearer to 7%.
Endeavour invests in equities and bonds to generate higher levels of income with more stability than pure equities.
Endeavour pursues defensive, income and growth simultaneously in one integrated investment process. This is achieved through individual investment selection in the context of the broader economic outlook.