Capital Flows and Asset Markets
Capital Flows and Asset Markets


Turning 50 has definitely moved me closer to the end than the beginning!
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I have just turned 50, so decided to hand myself into the Louvre as a museum piece. They told me to “Get Stuffed”, so a taxidermist has been booked.

With the end close than the beginning I thought I would reflect on a few learnings from my life so far, and how that reflects on my decision to start a new fund.

  1. Financial markets and politics love extremes - the ACTUAL truth is always somewhere in between.

Financial markets and politics are often binary systems - buy or sell, yes or no, and lend themselves to extreme outcomes. In current markets the “Truth” is tech is everything, and the US will dominate China forever. Maybe this is true, but I suspect the real truth will be somewhat less extreme.

  1. It is better to give early rather than forcing people to take later.

Generosity tends to pay off, particularly when things are going well. The vast majority of people are not offended by success, but greediness is very off putting. A good example is the current attitude of US tech to paying taxes, and cartel pricing. By forcing governments to “take”, they will end up in a far worse position that if they had been more generous in their attitudes.

  1. Work is for respect, not love, and family is for love, not respect.

Everyone needs to feel some pride in what they do, but should never forget that work is results focused, and as soon as your results are poor, you are done. Conversely, family is for love, and will always be there for you. But don’t expect respect. Family will always be the ones to tell you how it is.

  1. Be trustworthy, but vicious.

In a workplace, you should be seen as trustworthy and team player. You should do what is expected of you, and treat people well. But the moment someone tries to take advantage of you, you need to break them. To make this work, you need to be clear in your communication on why you feel that you have been taken advantage off.

  1. If you are relying on a contract for someone to behave well, then you should not be dealing with them

If you cannot rely on someone to do the right thing, you should never go into business with them. As soon as you need contracts and lawyers to enforce good behaviour you have lost.

  1. Working out what you really want in life will not solve your problems, but will make decision making easy.

I will use an extreme example to prove a point. I often meet people who say they wished they had children. What I think they mean to say, is they wished they had met someone up to their standards to have children with. In the modern world, if children is what you want, then there is nothing to stop you from having them, either by adopting, using a surrogate or a myriad of other methods. That might sound harsh, but without identifying the real issue, you can never really make progress.

  1. There is a thing as too much money

I have met a lot of very successful, but miserable people. Most of their misery comes from money, and typically is derived by trying to buy short cuts in life. Perhaps the most egregious is parents trying to buy their children success, rather than teaching them how to be successful. For most successful people, the cut and thrust and the striving for success is the most rewarding part of their lives, and yet they choose to deny their children the same chance to strive. Many go out of their way to deny them the same experience. Often this is driven by seeing their children as extension of their own existence, rather that a unique individual. Let your children fail, so they can learn what is truly meant to be their path.

Finally, why am I thinking of starting a new fund? Its not for money, although if I am successful, the money will come. What made me happy with my old fund was identifying the areas where market were reliably wrong - namely currencies and bond yields. And I was able to build a successful fund that took aim exactly as these areas. Then the world changed, or to be more accurate politics changed.

I think in the new political world we live in means that investors will get bond yields, interest rates, currencies and inflation consistently wrong. I am excited by these ideas, and the one way to prove you are really right is in the financial markets is with a fund. Why? Because in fund management you have to be right before the fact, not after. Which makes it a greater challenge than being an economist, journalist or market commentator. And if I get it right, maybe then I can enough money to actually buy a place for my stuffed body in the Louvre. You can only dream!

Capital Flows and Asset Markets
Capital Flows and Asset Markets
Explaining how capital flows and asset markets work