How does one best determine 'value' in stock markets? What forces act to produce the regular material deviations from even the best estimates of such value? These are the key questions that this masterclass seeks to answer. Although using historical examples, this masterclass is an educational tool for active investors.

Thursday 4 June–Saturday 6 June 2020
1st Floor MBA Suite
Derry Pickford, Principal, Aon Hewitt Investment Consultants
Stephen Wright, Part-time Consultant, Smithers & Co
John Greenwood OBE, Chief Economist, INVESCO plc
Peter Warburton, Chief Economist, Economic Perspectives Ltd
Herman Brodie, Managing Director, Prospecta Limited
Russell Napier, Co-founder, ERIC Electronic Research Interchange


Unfortunately this event is now cancelled. Apologies for any inconvenience.

Day One

08:00–20:00, 4 June 2020

Valuing Stock Markets: Module 1

In this opening session we will explore the remarkable features of volatility compression of returns and the consequences for equity valuation. We will submit equity valuation metrics to five key tests of validity.

Can Markets Be Valued? The Five Key Tests

We will explore three of the five tests and take a look at the:

  • Dividend Yield
  • Redefining Dividends: the 'Cash Flow Yield'
  • The Price-Earnings Multiple

Applying the Tests (continued)

  • Adjusting the P/E
  • Yield Gaps and Yield Differences
  • "q"

Investing in Periods of Inflation, Disinflation and Deflation: Module 2

Characterisations and stages of a domestic inflationary process. International determination of inflation.

Breakout Session I

Review: The Great German Weimar Inflation, 1918–1923. Investment returns in different inflationary climates.

Breakout Session II

Review: US Equity Investing During the Great Depression. Where now for global inflation?

Day Two

08:00–20:00, 5 June 2020

Monetary Theory of Asset Prices: Module 3

The monetary theory of the business cycle and asset prices: how central banks create money and how changes in the balance sheets of commercial banks also lead to the creation and destruction of money.

Measuring Money and Credit

  • Broad money and its 'counterparts'
  • The demand for money and changes in velocity
  • The impact of fluctuations in money and credit
  • The impact of different exchange rate regimes—fixed, managed, and floating—on money creation and growth
  • Money supply and asset prices in different countries
  • Printing-press money versus fountain pen money

Financial Bubbles and Bursts

  • Two overlapping bell curves and the three phases
  • Bubbles—practical examples
  • Debt-deflation, practical examples
  • The importance of balance sheet repair

The Data on Money and Credit

  • Overview of current data on money and credit
  • Single country versus multi-country measures
  • Divisia measures of money and their usefulness
  • Flaws in the global monetary system and implications for investors

Behavioural Finance: Module 4

  • Introduction
  • Heuristics and biases
  • Prospect theory
  • Cognitive dissonance

Breakout Sessions

Analysis of an investor and the pension crisis.

Day Two Wrap Up: Module 5

Mean reversion of equity valuation.

Day Three

09:00–13:00, 6 June 2020

Leading financial practitioners Jon Compton and Edward Chancellor use their experience and their understanding of history to assess the long-term outlook for financial market returns.

Monetary Theory of Asset Prices

  • Missing the Obvious—Thirty-five Years in the Investment Tranches
  • The Credit Cycle and Asset Allocation

Programme Conclusion

A review of the course material focusing on how the various forces studied drive the mean reversion of equity valuation.


Derry Pickford

Derry completed his undergraduate degree in Economics at Cambridge University. After graduating, he joined Smithers and Co. as an analyst, where he researched major imbalances in the global economy. He then joined Sloane Robinson in 2003 where he became Chief Economist. Derry was Co-head of Asset Allocation at Ashburton Investments and is currently Principal at Aon Hewitt Investment Consultants.

Stephen Wright

Co-author of Module 1: Valuing Stock Markets. Peter is a professor in Economics at Birkbeck College, University of London. He was previously a staff economist at the Bank of England. Since 1991, he has been a part-time consultant to Smithers & Co., writing reports for professional investors on financial markets. He is co-author (with Andrew Smithers) of Valuing Wall Street.

John Greenwood OBE

Chief Economist at INVESCO plc. As editor of Asian Monetary Monitor, he proposed a currency board scheme for stabilising the Hong Kong dollar in 1983 that is still in operation today. In 2007 he authored a book entitled Hong Kong's LInk to the US Dollar: Origins and Evolution which covers the collapse of the currency in 1983 and its subsequent restoration to stability under the plan he devised.

Peter Warburton

Author of Module 2: Investing in Periods of Inflation, Disinflation, and Deflation. Peter has been a member of the Institute of Economic Affairs' Shadow Monetary Policy Committee since its inception in 1997. He acts as an economist to the investment management company Ruffer LLP, and is also Managing Director of Halkin Services Ltd, and Chief Economist at Economic Perspectives Ltd. He is the author of Debt and Delusion.

Herman Brodie

Co-author of Module 4: Behavioural Finance. He spent a decade in investment banking roles in Paris and in Frankfurt, and worked as a quantitative trader of currencies and financial futures in London. In 2000 he co-founded his first company, Cognitrend, a consultancy to advise financial institutions on the utilisation of behavioural finance research. He currently pursues this goal as Managing Director of Prospecta Limited.

Russell Napier

Co-author of Module 5: A Practical History of the Stock Market and Financial Institutions. Russell was a fund manager for five years before joining the broking firm of CLSA as an Asian equity strategist in 1995. From 1997 to 1999, Russell was ranked number one for Asian equity strategy in most industry polls. Russell is author of Anatomy of the Bear: Lessons from Wall Street's Four Great Bottoms.

Who This Masterclass Is For

CEOs and CFOs in financial institutions both in the public and private sector, in addition to finance managers, strategists, analysts, and fund managers.


  • Day One: 08:00–20:00
  • Day Two: 08:00–20:00
  • Day Three: 09:00–13:00

Course Fees

The course fee is £1,750. This includes all tuition, course materials, and daytime catering.

There is a 20% discount for alumni and staff of the University of Edinburgh. Please contact the Executive Team for more details.


Registration for this course is through the DIDASKO website:



If you require accommodation, please contact us for information on our preferred suppliers and special rates.


History's predictive powers are considerable. This course helps us understand them, and then apply these lessons to investment management today. I would recommend A Practical History to anyone who wants to imporve his or her understanding of investing.
Mark Tyndall, Co-founder and CEO, Artemis Investment Management Ltd
A Practical History of Financial Markets takes on some of the more important, and more daunting, questions in finance and investments. Using a broad historical context and a diverse range of analytical approaches, the course puts standard precepts such as 'investment value' under the spotlight, with sometimes unexpected results. I find myself thinking back regularly to what I learned on this course—and then applying it.
Andrew Howell, CFA—Emerging Markets Strategist, Citi

Further Information