Quarterly Newsletter – The Advisor

Since time immemorial, the exchange of knowledge and innovations have been disruptive to civilisations. These exchanges allow for cultural evolution to become cumulative and for intelligence to become collective. They also foster new industries and advance a civilisation’s wealth.

The most talked about innovation of the past year is Artificial Intelligence. AI has the potential to transform our lives. AI will almost certainly displace some jobs, but it could also empower people with new productivity enhancing tools. It’s already creating person-alised tutors that help turn children into accomplished students. It’s developing lifesaving drugs incredibly quickly. AI could also create trillions of dollars in wealth for companies and investors. The world is still in early days of the AI era.

Read the Spring 2024 Advisor

These quarterly missives often concern journeys into the future. The way is always uncertain, the destination opaque. What may help guide us for-ward is an awareness of where we have been. With driving, the rearview mirror is incredibly useful for manoeuvring a vehicle – but to rely on it solely for steering is dangerous and stupid.

Since the financial crisis of 2007 – 2009, investors have dealt with the distortions created by Zero Interest Rate Policy (ZIRP) and Quantitative Easing (QE) separating the financial markets from economic fundamentals. Today’s markets are not moved by economic fundamentals but are driven by liquidity, momentum and short-term emotions. For the last fifteen years, investors have become inured to this environment and expect, after the steepest rise in interest rates in decades, a return to “normal”.

Read the Winter 2023 Advisor

Ninety-three year old Buffett, who knows a thing or two about successful  investing, is not suggesting you cannot ever lose money – but he is emphasizing the mindset investors should possess.

It is gratifying to find winning investments. And winning periods are always welcome. But for all of the winners there are also an awful lot of losing investments. Over time, avoiding the losers (and losing years) could help you in achieving your financial objectives. Let’s follow some threads…

Read the Autumn 2023 Advisor

Are we experiencing a market regime change?

Across the West, sovereign debt levels were last this high eighty years ago; back then the US Dollar replaced Sterling as the primary reserve currency. Inflation was last this high forty years ago; then governments retreated from interfering in their economies. Interest rates were last this high fifteen years ago; then the sub-prime mortgage bubble burst. In all of these cases, change arrived gradually, then suddenly.

The focus these days on interest rates is understandable, but what the US Federal Reserve is doing needs to be understood in the context of the most leveraged American economy in history. The damage that the Fed and its monetary policy experiment (zero interest rates & quantitative easing) has inflicted on the American economy is incalculable. 

Read the Summer 2023 Advisor