Articles I’m reading
Bridgewater published an article “The Big Picture: Back to the Future” where they explore the big secular forces that will dominate the investment landscape for this decade and more.
These secular forces include the likes of government spending, geopolitical tensons, Artificial Intelligence (AI) and climate change. There’s also a mention of how interest rates as a policy tool is back in play after a decade of zero-interest rate policies. Below is a chart from their article that sums up the change in the landscape:
They also added in the conclusion that beta risk isn’t going to pay as much as it did over the last 60 years (I strongly agree with this) and that investors got to be more proactive in terms of seeking alpha relative to their adoption of beta risk:
Over the last decade, cash was “trash,” yielding a negative real return on your money. A confluence of favorable secular forces led to one of the best periods for beta in the last 60 years, as risky assets like stocks significantly outperformed holding cash. Exceptional beta returns meant that alpha often wasn’t required for investors to meet their goals. Looking ahead, the returns offered by cash and “risk-free” bonds look a lot more attractive, while the outlook for beta is more normal, with elevated risks for some assets and reasons to think tactical opportunities may be more valuable.
Commodity researchers Goehring & Rozencwajg released this recent article on their website to reiterate their bullish take on Uranium (now that it’s getting hotter and garnering attention from the general public).
I went from a high-four figure investor to a multiple six digit one from investing in Uranium-related exposure over the years so it’s been one of my best investments. Back when I found the opportunity, I thought it was like ‘shooting fish in a barrel’. I’m managing my positions tactically now that the general public is aware of this opportunity. Take a read if it piques your interest.
The Spanish Civil War is one of history’s worst civil conflicts and it still haunts the consciousness of Spaniards till this day. The events of that era never fails to send chills down readers’ spines.
Niccolo Soldo wrote about this on his substack and illustrated how civil disagreements and political fragmentation deteriorated over a period of a few years into violent outbreaks and full-fledged civil war. There are eerie comparisons with the current political environment in some western countries today.
Also, I’ve pivoted back to trading cryptocurrencies back in Q4 last year, and the opportunity set is immense. I’m now wiser after the previous cycle and have moved to a systematic way of trading the market. It remains a gambling den – a haven for traders like myself but a strong disclaimer: trade the market as it is. If you’re thinking of getting involved you better know what you’re doing and have a strategy worked out. Brent Donnelly shared his thoughts on the SEC approvals of Bitcoin ETFs here.
Video to watch
Kevin Muir came on Blockworks sharing his latest views on recession, inflationary dynamics, rate volatility and his bullish view on Japanese equities. He also explained why buy-write ETFs are a “terrible product”.
I love listening to the author of the Macro Tourist – Kevin is once more at his best. Take a listen:
A Book I’m reading
A Splendid Exchange – William J. Bernstein
This is an absolutely delightful read from author Bill Bernstein who uses an attractive prose to spin the story of trade for readers.
Instead of using a ton of data, Bernstein illustrates the history of trade through selected narratives in history, offering readers glimpses into the physical, mental, and emotional journeys of colourful episodes of merchants from various societies trading goods across land and sea. From the Phoenicians and Athenians to the Kârimî and Venetians, traders and merchants had to take an enormous amount of risk (embracing death at times) in the hopes of striking it rich.
One immediate takeaway: it usually takes a strong military power’s explorations and conquests to allow a flourishing of trade and ‘subsidising’ of the costs of securing routes. Merchants don’t take unnecessary risks when they could. Throughout the past 2500 years, that strong power has rotated between the Athenians, the Romans, Tang China, the Mongols and the British Empire. It makes readers wonder about our present state of the world today and how the current state of global trade may eventually change.
Chart that caught my eye
My friend Alex Barrow shared this chart of Greek equities in his latest weekly sharing:
Greek equities have been one of the top performing equity markets worldwide in 2023. The Global X MSCI Greece ETF (GREK) has been on an absolute tear, and looks set to continue its momentous rally.
After being left for dead by global investors since the debt crisis, it’s probably something no one has ever pitched to you. I have no opinions on this market although I used to trade GREK actively in 2019 to play elections in Athens – DYOR / DYODD.
Kean Chan 