Well we all made it through the first week post the Brexit vote. Let’s not go over old ground except to say that the relative calm of financial markets has more to do with the promise of more QE than anything else. Housebuilders and banks have come under sustained pressure, but like many cyclicals there are value opportunities opening up.

As an example, when housebuilders got smashed in 2008 they were up to their eyeballs in debt, not so this time around in fact the opposite and lessons were learned. Our housing market will come under pressure but our island is the same size and we still have a housing shortage and that didn’t change last Thursday.

The UK stock market at the time of writing is forging ahead which seems incredible given the headlines we have all been reading alluding to the beginning of the end of civilisation and it’s all the fault of the Brexit. Politicians and Company bosses will be able to blame the Brexit for almost anything going forward and whilst some claims will have validity many will not. It also needs to be remembered that the largest UK companies do not really represent the UK Plc accurately at all; arguably a smaller companies index is a better indicator.

As we keep emphasising the expensive assets and those considered safe just keep getting more and more expensive in absolute terms and relative to the assets considered riskier. It’s rarely a good idea to buy assets that are expensive relative to history in any asset class, but it can take time for this to become apparent.

One final point on politics. The Austrian presidential election result was overturned this morning and will need to be held again. This is significant because it’s the far right that narrowly lost who legally challenged the result and won.

Whilst not demanding to leave the EU straight away if ever he got real power, Nobert Hoffer the far right candidate is demanding great controls over issues such as immigration. We will have to see what the outcome of the new vote is but politicians in Europe might have something else to concern themselves with other than the tiresome British.

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