What caught my eye this week.
Perhaps Jerome Powell should do a stint on Strictly Come Dancing when he retires from the US Federal Reserve?
The Fed chair would surely be an audience favourite. No dull waltzes or clunky rumbas from him. Think more the quickstep, with its rapid movements and sudden turns.
Because after hiking the US Fed funds rate at a the fastest clip in modern history, Jerome has suddenly pivoted.
A few weeks ago he wavered when put on the spot about whether US rates would have to rise further.
But this week he spun. The Fed is done.
Joy to the World
Well, probably. You never quite know what will happen on the dance floor – it’s an interaction not a solo show, after all – and we can’t be certain that rates have been lifted enough to tame US inflation for sure.
But it looks that way and markets seem to have made their mind up.
Here’s the yield on the US 10-year Treasury – perhaps the single most important metric in the investing world:
Source: FT
At the end of October the US 10-year yield was tickling 5%. While inflation turned long ago, the Fed still didn’t seem convinced that it had definitely seen off a price spiral. Everyone was gloomy.
But six weeks later and the yield is down by a full percentage point! If this is a head fake then we haven’t seen the like since Yoda tried to convince Luke he was just another space fraggle.
The equity markets seem persuaded. They’ve been flying for a fortnight:
Source: Google Finance
Then again the US indices have been advancing all year – mostly thanks to the very largest tech stocks. The S&P 500 is now up 23% and the Nasdaq by 43%. The damage inflicted by the 2021-2022 rout is mostly repaired, at least in nominal terms.
Of course the FTSE 100 is under-performing in this latest rally. Indeed it’s barely positive for the year.
But that’s almost reassuring. Seeing the UK’s ever-moribund index topping the leaderboard in 2022 was the investing equivalent of a dread blood moon.
Go Tell it on the Mountain
For what it’s worth I agree inflation is probably yesterday’s news, at least in the US.
Money has become much dearer over the past 18 months and the pain has been widely felt. Many commentators claimed the US needed to see a big recession to undo the supposed ‘excesses’ of the pandemic era. But I’m not convinced that historical comparisons were very useful this time.
I always sided with the argument that inflation was mostly driven by supply shocks caused by unprecedented rolling shutdowns around the world in response to Covid. Much more so than by low rates and pandemic support from governments.
The latter was particularly unconvincing, and seemed a politically-motivated charge. Of course some governments pumped cash liberally into their flailing economies, but others didn’t and the whole world got inflation just the same.
Anyway it’s not like fiscal support threw gasoline onto a raging bonfire. Has everyone forgotten the zombie state we were living in for most of 2020 and well into 2021? Talk about depressionary forces.
My economic metaphor throughout the pandemic was of a cranky machine juddering and spluttering as it lurched in and out of life. I had a particular machine in mind here – an ancient ‘collator’ that we used to stitch together the pages of my student newspaper. If that machine could moan so much in just an evening, it’s no wonder that just-in-time supply chains foundered from worldwide commotion.
Moreover 20 years of reading company reports means I’m very familiar with how a single supplier going bust or a flood at a warehouse can derail a firm’s operations for months.
So yes, China going offline for long spells probably gummed up the works.
Still, I was in camp ‘inflation is transitory’ and it wasn’t. At least not over the timescales people were using. So no cigar.
In the history books, our recent spurt of inflation may one day look like a blip. But it hasn’t felt that way – not in our portfolios or at the supermarket.
Hark the Herald Angels Sing
Who knows what this all means for our portfolios? US markets look quite expensive again and the rest of the world reasonable value. So it’s back as you were on that score.
As a stockpicker I’m finding a UK market littered with apparent bargains. Some of these cheap shares and discounted trusts will be holed below the waterline, but the sell-off has been too widespread for this not to feel to me like an opportunistic time to buy.
And then there’s fixed income. This time last year I reminded readers that the steep sell-off in bonds we’d seen was not a reason to avoid bonds in the future. If anything the opposite, as higher yields promised better returns to come.
Indeed if inflation falls faster than expected in the UK then gilts could put up very nice returns in 2024.
I still suspect we have a stickier inflation issue than the US thanks to our own self-inflicted troubles, but nevertheless we could eventually see (relatively) striking returns here, especially from longer duration assets.
But the thing about the future is it’s uncertain and confounds.
My self-proclaimed insights into inflation and the rocky road to come in early 2022 didn’t stop my portfolio getting shellacked. Equally, at today’s valuations US inflation could hit target and rates could even be cut – and US shares might still go south.
As ever it’s a long-term story that most investors are better confronting with a plan not hunches. Keep investing through thick and thin, stay diversified, and rebalance as required.
If you want excitement, try the tango.
Jingle Bells
This is our last regular post until Weekend Reading on Saturday 30 December. I’ll have a Moguls post out next week for the hardcore though, so look out for that if you’re a member.
In fact this feels like a good time to thank everyone who has supported us by becoming a member. You’ve had some decent additional content – especially from my co-blogger – and enjoyed ad-free browsing on the website. We’ve earned a few extra quid that is making this site more sustainable at last.
We’re not quite there yet. But presuming you don’t all cancel and we continue to sign-up new members at the current rate we should hit our target by summer. A big relief after 17 years of blogging without a viable business model for us.
You know what to get us for Christmas!
Thanks too for reading this post and all our others in 2023, for directing friends and family our way, and for the thousands of comments over this year that have often added as much value as anything we wrote.
Enjoy the festivities, wherever and whoever you are!
From Monevator
Should you build an index-linked gilt ladder? – Monevator
From the archive-ator: Debating FIRE – Monevator
News
Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.
Bank of England holds rates at 5.25% for third month – Sky
UK economy slowed in October as higher rates and bad weather bite – BBC
Hargreaves Lansdown and AJ Bell shares slump on FCA customer cash warning – Proactive Investors
Ofgem to add £16 to energy bills to help suppliers recover £3bn in bad debts – Guardian
Halifax and Nationwide both predict falling house prices in 2024 – This Is Money
Next UK election set to be the most unequal in 60 years – Guardian
Big financial news site using AI to copy competitors wholesale – Semafor
Almost half of Gen Z think financial compatibility more important than looks – B.I.
Sydney man dubbed ‘The Annihilator’ wins world Excel championship – Guardian
Can Japan’s legendary savers spark a stock market boom? [Search result] – FT
Products and services
Freetrade launches Treasury Bills offering a 5.2% yield – This Is Money
Mastercard and Visa face post-Brexit fee cap – BBC
Get £100-£200 cashback when you open an account with Interactive Investor. Terms apply – Interactive Investor
Four financial gift ideas for kids this Christmas – Which
Mortgage lenders cutting rates as gilt yields tumble – Evening Standard
Hargreaves Lansdown new cashback offer for pension transfers, with the largest pots eligible for £3,500. Terms apply – Hargreaves Lansdown
How to use a credit card without harming your credit score – Which
Open an account with low-cost platform InvestEngine via our link and get up to £50 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine
How to save money at Waitrose – Be Clever With Your Cash
Homes for sale near English village greens, in pictures – Guardian
Comment and opinion
Charts to fit any story and a story for any chart – Klement on Investing
What’s next for first-time buyers? [Search result] – FT
Better and better – Humble Dollar
All-time highs – Fortunes and Frictions
Pasta, pizza, and passion – A Teachable Moment
Stocks outperform bonds by less than you think [Search result] – FT
Fixing your mix – Humble Dollar
How will equity markets perform in 2024? – Behavioural Investing
Eight steps to getting your affairs in order – RockWealth
The advantage for stocks when inflation rises [US but relevant] – Morningstar
Naughty corner: Active antics
The mystery of Britain’s dirt-cheap stock market – The Economist via Yahoo
Markets are becoming less efficient not more, says AQR [Search result] – FT
The illusion of the small-cap premium – Finominal
2024 outlook for private markets [PDF] – BlackRock
Bitcoin is earning its place in a balanced portfolio – Advisor Perspectives
Kindle book bargains
Dead In The Water by Matthew Campbell – £0.99 on Kindle
When McKinsey Comes to Town by Walt Bogdanich – £0.99 on Kindle
The Birth of Netflix by Marc Randolph – £0.99 on Kindle
A Kidnap Negotiator’s Guide to Influence and Persuasion by Scott Walker – £0.99 on Kindle
Environmental factors
Wild pigeon chase – Noema
Welcome to Hawaii, the extinction capital of the world – Vox
Is Costa Rica’s green halo fading? – Guardian
Research suggests investing in polluters yields higher returns – Alpha Architect
Moving into the agrihood – Modern Farmer
Renewable energy investors should see green in Africa – Institutional Investor
Future of media mini-special
Tensions between macro and micro-culture will turn into war – The Honest Broker
How journalists can win people back – The Walrus
Rising interest rates rock billion-dollar bets on music [Search result] – FT
Off our beat
Routine kills a man – Life After The Daily Grind
Colonising space will be more difficult than anyone expected- Inside Hook
Will new tech end the need for human pregnancy? – The Walrus
A review of Number Go Up, a crypto history – Marginal Revolution
Inside the returned goods industry – The Atlantic [via Abnormal Returns]
You only die once – We’re Gonna Get Those Bastards
And finally…
“One major flaw inherent in the Sharpe ratio is that the risk component of the measure (volatility) does not distinguish between upside and downside volatility. In regards to the risk measure, large gains are viewed as equally bad as large losses, a characteristic that completely contradicts most people’s intuitive notion of risk.”
– Jack D. Schwager, Unknown Market Wizards
Like these links? Subscribe to get them every Friday. Note this article includes affiliate links, such as from Amazon and Interactive Investor.
Happy Christmas y’all. Now about that Moguls subs. On a very modest stake, off a mog article a while back, which I obviously now regret not doing more, I am up £600, I appreciate the way you have to read between the lines, a little bit back to the old days post GFC. But I can’t moan on the ROI. Bravo and thank you 😉
Merry Christmas and a target making New Year TI and all at Monevator.
“My guess is that the next Bitcoin doubling will be driven by the long-awaited crypto “killer app” that persuades millions of people to learn and use crypto, not just hold or trade it.”
Yup, 13 years in, that killer app is still lurking just around the corner .
A very Merry Christmas and A Happy New Year in 2024 to The Investor and the Accumulator and the Moguls and the Mavens. But remember that Scrooge was not a happy man…
Happy Christmas and a Happy New Year to all
Had to stop looking at Portfolio last Christmas week so as to enjoy the family gathering-it worked -there’s a lesson!
Now Portfolio up 8% on this time last year -large bond position not withstanding
Still not going to peek from now on till the New Year-learnt my lesson!
Stay the course goes onward and upward!-some of it due to Monevator!
xxd09
“My guess is that the next Bitcoin doubling will be driven by the long-awaited crypto “killer app” that persuades millions of people to learn and use crypto, not just hold or trade it.”
Why would anyone spend crypto if there is the possibility of its price doubling?
Crypto can be a medium of exchange or it can be a vehicle for speculation. I really can’t see how it can be both.
Thanks for the links and Merry Christmas! I enjoyed the Life After the Daily Grind post. It does get boring when routines set in and I find this can even happen occasionally in retirement, who knew!
I’ve just seen the Investment Trust Handbook 2024 is out for some Xmas reading, a free download. Sorry if you already posted it – available here or just get it on Kindle https://www.harriman-house.com/ithb2024
I can safely say I will always maintain a zero percent allocation to Buttcoin and any other crypto nonsense.
@Marco: Likewise. Buy shares & you part own businesses. Buy BTCs you get ledger entries signifying you’ve got ledger entries. Crypto is an empty box, as SBF himself admitted, IIRC. It’s been longer now since Satoshi’s White paper than from the first Web browser to the iPhone & still no use case for Blockchain.
@All: Merry Xmas one & all. With thanks to @TI, @TA & @Finumus for a fantastic year’s worth of content. I’ve certainly enjoyed the extra Maven & Mogul pieces. 🙂
Yes, Powell was incredibly dovish and it does feel a bit like a green light for risk assets. But there seems to be a lot of bullishness around and the US stock markets are overbought on a daily timeframe
On the bitcoin front, I understand the scepticism but equally the whole crypto space is now valued at about a trillion USD having come from virtually nothing, and reached a peak of about 3 trillion in 2021.
There may very well turn out to be nothing to it but when you see numbers like that, and the kind of asymmetric returns generated, it may be worth having a closer look and maybe have a toehold (ie low single digit percentage, if even that) position just in case it does turn out to be the next best thing and we just haven’t understood it yet!
There are different ways to gain exposure to crypto -you don’t have to buy the actual crypto if you are uncomfortable doing do. There are listed stocks in the UK which can be bought (some of which sole purpose is to invest in crypto).
Not financial advice of course!
Hi Monevator,
Do you happen to know of an automatic rebalancing portfolio similar to Money Moustache’s betterment product for a Junior SIPP?
@indyinv3.0 #10: enjoyed your substack after clicking through. Thank you.
IMO it’s important to distinguish between 3 separate issues:
1. Economic case for crypto/Blockchain (answer, there just isn’t one).
2. Investment case (answer: it’s a giant, persistent, self assembly Ponzi. As such, it’s inherently uninvestable).
3. Trading case (answer: if you leave aside your feelings about 1. & 2., then there might previously have been, in certain circumstances, for certain speculators, some v. profitable trading opportunities).
I loathe crypto & the nutty libertarian sub culture which spawned it. But I’ll concede that there have been many superb high risk/low stakes/high return quantitative trading opportunities along the way, each and all of which I’ve missed participating in completely. I’ve steered clear of them all, never buying or selling so much as a Satoshi of anything. However, from a purely selfish, profit motivated perspective; I confess now to wishing that I hadn’t given crypto such a complete and total wide berth; and to regretting that I wasn’t willing to so much as touch it with even a bargepole attached to another bargepole: e.g., IIRC:
– Back in Jan 2015 an anonymous, self described ex-quant began posting a trading strategy of equal weighting the top 10 coins by their cross sectional momentum amongst the top 100 most liquid coins (by their past week trading volumes) provided also that they each had positive 7-day absolute momentum (otherwise s/he held cash/fiat for any 10% allocation slots for coins that didn’t).
– S/he then rinsed and repeated every 7 days.
By Dec 2017 their idea showed total paper returns of 4,000 x in 3 years.
In reality, of course, there would be price slippages, trading frictions and dealing costs to account for; as well as taxes for them to pay annually, based upon this being their more heavily taxed trading income, and not capital gains.
After that point, the ex- quant took down his/her site.
However, we’re almost into Jan 2024 now, and Jan 2015 is way behind us. BTC is at over $40k today and not under $200 as it was back then.
Accordingly, the scope for yet another massive, sustained pump and dump price manipulation bubble is surely not there in the same way that it was 9 years ago.
The low risk/stake to high reward/payout ratio for a trade just isn’t there anymore unless you’re a true believer that crypto takes over the world. I most assuredly am not.
As I share the late Charlie Munger’s dim view of the whole crypto ‘scene’; having first made the mistake of steering clear of crypto when there really were some asymmetric payoffs, I’m not going to now make the mistake of getting involved with it when they’re aren’t.
Apols for typo: should be “there aren’t”, and not “they’re aren’t”. Spotted too late to correct.
Quick question for the hive-mind. Disposing of lifestrategy 60 acc for lifestrategy 60 inc. CGT trigger or is it exempt? Pretty sure someone here has already answered this in article/comments but I’ll be beggared if I can find it..
@Rhino #14 If this is an unsheltered (for tax) disposal of LS60 you will need to work out if there is any CGT to pay. Also, if the disposal is more than 4 times the CGT allowance you need to notify HMRC even if there is nothing to pay. Also it is best to hold income units in the unsheltered account for ease of declaring / working out any taxable dividends. To defuse CGT on LS60 you can do what I did – sell and re-purchase as 50% LS80 and 50% LS40 income units to avoid the 30 day rule on repurchase of the same fund (bed and breakfast rule). This article might help https://monevator.com/capital-gains-tax-turnover/
@BillD, cheers, but not quite the question I was asking.. specifically wondering if buying same fund but from acc to inc is cgt exempt. Bit like when the RDR came in switching to clean funds didn’t trigger any cgt (I think).. About as clear as mud out on the ‘interwebs with about a 50/50 split either way as to what the situation actually is. Would phone HMRC to check, oh hang on thats not been possible for about a decade..
e.g. https://forums.moneysavingexpert.com/discussion/5986609/convert-acc-to-inc-class and https://money.stackexchange.com/questions/99919/can-i-convert-fund-acc-units-to-inc-units-without-triggering-a-cgt-event
@BillD (15) I believe the obligation to report disposals of more than four times the CGT annual exempt amount only applies if you have to do self assessment. Obviously if there is tax to pay it has to be reported regardless. Much to my annoyance, I do not qualify for self-assessment. This is a source of constant frustration to me, as in every other dealing with HMRC it would make life so much simpler.
ah, found the MV article, and the advice is ‘take expert tax guidance’ (and I can see comments from me from 7 yrs ago!) – https://monevator.com/income-units-versus-accumulation-units-difference/
Thanks for all the great articles this year, Team Monevator – Merry Christmas and may it be a prosperous 2024 for all!
@Timelikeinfinity
I have always found the Monevator blog to be full of common sense and good information. The general idea of buying, holding and letting compounding work for you over time is usually the best strategy for most, if not all people. It takes patience and time but if you follow this strategy rather than chasing glamorous stocks or investments with no fundamental value or very little, then you will most likely come out well ahead of the vast majority of private investors, and professional investors, for that matter.
So I am probably more in agreement with you than not regarding crypto. I agree that the really high asymmetric payoff has probably passed us by to a great extent. If you had bought Bitcoin, for example at 1$, and just bought and held (rather than tried to trade it) you would currently be up approximately 40,000x!
I don’t want to tarnish this blog too much with talk of crypto as it detracts from the good work being done here so I will save the rest of my thoughts for somewhere else!
@Time like infinity , good comment, I do agree. I had a bit of a ‘lite’ version of that dabbling in trading with rather suspect P2P lending secondary marketplaces – even if you don’t believe in the product, doesn’t mean there’s not money to be made. It does feel a little grubby though, productive assets feel better.
I’ve never really felt the risk/reward is there for trying that with crypto though, just too many ‘ clicked that one thing, lost it all’ stories.
What remains fascinating is whether somehow Bitcoin could in the long run be that ‘gold-like’ asset that goes all over the place but could diversify a portfolio well. I still currently lean towards ‘no’ because:
1) Risk of loss (as above)
2) As per your comment, I don’t want to associate myself with those people. Extreme libertarians, shills, frauds and serious criminals. Great company!
3) I’m far from convinced that these price bouts are organic – price is too easy to manipulate currently.
4) The situation with Tether has lasted a remarkably long time for something that looks so unstable. The consequences of that collapsing eventually aren’t clear to me, but don’t look good.
What’s remarkable to me though is the amount of people who crop up in other contexts who say they have £x ‘000 or 5% or whatever in crypto, including I believe our host here. That fairly widespread take up even despite a spot ETF does make me think that despite it being a massive crock, it could still technically be worth the candle.
At least gold is shiny. FFS
@Time like infinity #9 – on a rather infamous Bloomberg Odd Lots podcast SBF referred to DeFi Yield Farming being a kind of magic box.
Build a box where you put ETH and another token, and advertise to users some insane yield, but the key is that the box pays out in its own native token. I’m sure no one needs to explain what might happen to the value of that token…
A modern version of a Ponzi scheme.
Thanks for all the good wishes and the interesting comments everyone!
I have been getting stuck into Christmas early staying at friends, and moderating through a haze of Prosecco and projector screen Christmas movies… 😉
Cheers to the dozen or so of you who added your names to the illustrious ranks of Monevator membership, too!
@ermine — Ah, thanks for sharing that. I am not going to take responsibility for blunders though so I can’t really take credit for the wins. Everything genuinely is a just idea for further research and a ramble for similarly-minded readers. You made the £600, well done! 🙂
@indyinv3.0, @far_wide, @flotron: thank you all. BTW “Banker on Wheels” has just (12 Dec) covered the portfolio proposition for BTC.
Although ETH2, post EIP-1559, has a ‘gas fee’ split between a base fee (which gets ‘burnt’ on chain) and a tip to the miner validating the PoS, and which, IIRC, is paid in real money ($); AFAIK Crypto otherwise has no actual real cash flows (measured in legal tender, and not in native/platform tokens).
If a securities’ instrument confers no legal or beneficial right to actual economic + legal cash flows then, arguably, it has no fundamental / intrinsic value, even if it has a substantial extrinsic one. Basically, it’s Picasso-like (or NFT of a Bored Ape-like) and, therefore, ‘worth’ only what anyone might perhaps pay (if anything) for such an oddity, from time to time. So, if the extrinsic value is $40k/ BTC, but the intrinsic one is precisely $0; then, for me, that’s likely to be deal breaker for any investment proposition. Obviously, the same argument could be made against gold and commodity futures (any roll yield excepted).
BTC and the other cryptos which have shown some staying power to date have also shown exceptional B&H returns for early HoDLer’s. But that’s likely true of any Ponzi. HoDLing is intented as a statement of faith in the token in question, but – in substance – it’s more of an unintentional bet on the continually expanding frontier of human stupidity/credulity in that it relies upon the idea of the great fool who is always willing to pay more for an intrinsically worthless ledger entry than you did. Still, that might not be such a bad bet. Albert E reputedly said that there were only 2 true infinities, firstly the Universe, which be wasn’t sure about, and secondly human stupidity, which he was.
However, short term, risk constrained trading on price action characteristics/ technicals, whether using cryptos or, for that matter, Picassos; might not be to implicate oneself with the underlying stupidity of ascribing extrinsic value to speculative assets with no possibility of intrinsic value (noting here that even profitless tech might become profitable eventually; but BTC will never have any cash flows).
Not buying into narrative/hype/shilling around crypto does not preclude trading it. It’s easier, I’d guess, to bail out on something which you don’t have any conviction about in order to cut losses or get out before a top. So, there are some advantages in trading, it seems to me, to asset agnosticism or asset apostasy.
The problem IMO with trading and crypto now is purely practical risk to reward. It’s just got far too big, even though it’s both a capitalisation minnow and a turnover tiddler compared to the FX, equities and bond markets. Crypto just can’t pump 100x (yet alone 1,000x) again as there’s not the headroom for it to do so.
Noahpinion covers this, without spelling it out, in the exponential price chart for BTC in his 7 Dec blog post “I think Bitcoin has room for one more bubble”, which runs from (eyeballing it) 2009 (based upon a mining cost of ~0.1 cents) to now. Moves are getting smaller with each price wave, especially on the upswing. 2009-11 took us up well over 20,000x, from a little over 0.1c to ~$30. After falling to ~$2 in late 2011, the pump of 2011-13 ‘only’ managed 500x up, going to ~$1k. After falling back to $170-200 in 2015, the 2015-17 pump wave then only took us up 115x to $19ish k. After falling to $3k at the end of 2018, the most recent wave barely managed 23x, going to $68k in 2021. If there’s one more pump from the $15k low of 2022 following the next halving event in 2024, then it’s surely going to be an awful lot less than 23x. If it occurs, and were it to then be anything less than a 5-6x pump, BTC would top out at less inflation adjusted than in 2021; which would be bad just from a technical PoV.
@TLI For someone who doesn’t like Crypto you are very well informed I must say 😉 And as a self certified Libertarian/Classical Liberal I’ll let your mis-characterisation’s pass as everything else was enjoyable and interesting commentary. In terms of regret at missing the boat I’m similar – have only trickled in 1% of net worth in an eyes wide open speculation over the last couple of years so I’ve not drunk any Kool Aid either.
For some balance I’ll throw a couple of key counterpoints:
1. Inflation is really just the theft of your spending power and significant drivers for higher inflation arise from government action. Endless public spending deficits, COVID shutdowns throwing a spanner in the world economy etc. If people feel there’s a better chance the value of their wealth will be protected in Crypto then that’s their decision and it doesn’t make them nutty. See Argentina for the last decades.
2. Lack of respect for Property Rights – again by governments in fiscal holes of their own creation. I don’t doubt that governments around the world will try and steal wealth from their productive citizens either by stealth or force to deal with increasing debt piles. As above it strikes me as perfectly rational to try and avoid that scenario in your personal financial planning.
But those things said I do agree the path for Crypto is completely unknown, anyone promising BTC to the moon etc are grifters and you’d have to be much more of a gambler than me to put more than single digits of NW to work in this space. Sure there will be many trillions of pixels delivered discussing the subject before we are any closer to finding out the answer!
Thanks @Steve B. I lean left, but while I disagree (profoundly) with Objectivism, I found the most persuasive and honest expositions of libertarianism in its most fundamentalist exponent, Ayn Rand, through her philosophy as expressed in John Galt’s speech in Atlas Shrugged, and via her non-fiction work, most notably The Virtue of Selfishness: A New Concept of Egoism. For me she goes wrong at the very beginning of her chain of reasoning, with the starting axioms upon which it seems that she thought all notions of sovereign individualism and rights must ultimately rest, namely that existence exists but can only be perceived (and given meaning) by the individual mind. Rather, existence exists and persists wholly independent of perception, individual or otherwise. The individual mind does not create, or even so much as understand, reality, but rather just makes up a model, which we each think of as the world, based upon our sense data. The mind does not so much create ‘meaning’ but rather simplifies – through its internal model – simply in order to try to keep us alive from one minute to the next. So, for me, there’s nothing uniquely special about the perspectives of the individual mind. Rather it’s just a part of reality. It’s a strange (but merely emergent) property of matter, but individual consciousness does not confer a privileged perspective upon which to build a of materialist philosophy. If that foundation plank of Objectivism falls then it seems to me to undermine the basis of belief in the sanctity (ethically speaking) of property etc.
I also worry that the pragmatic version of negative liberty which Isaiah Berlin came up with in his Two Versions of Liberty in 1958, as a counter to what he saw as the excesses of the left with positive liberty, is itself now at risk of ossification into state ideologies (Reaganomics, Thatcherism, Monetarism, Friedmanism, austerianism etc), and of making claims to scientific ‘certainty’ that Berlin had critiqued the left for, most notably in Marxism, which Karl Popper before him felt was especially dangerous in its claims because, unlike a real science (but like religion), it was, he thought, set up to be unfalsifiable.