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Paid episode

The full episode is only available to paid subscribers of Capital Flows and Asset Markets

THE RUBLE AND THE YUAN AND NEW WORLD PORTFOLIO CONSTRUCTION

Currency markets are showing us the the new world.
24

Clearinghouses had a lot to do with me deciding to give back capital. I had looked at them in detail, and come to the conclusion that if they followed the rules as set down by regulators, they were destined for disaster. When Covid happened, I expected clearinghouses to become big problems, but in the end nothing happened. What we have discovered with LME and now also with ICE, is that the rules are applied on a discretionary basis, or to put in another way, one rule for big boys, and another for everyone else. For me, this has been a relief. When clearinghouses did not blow up during Covid, I wondered if I was stupid, and had just not understood the system properly. But now I know I was not stupid, just naïve. Fortunately, while there is no cure for stupidity, there is a cure for naivety.

I have worked hard to cure my naivety, so I feel like I am in a place to start thinking about portfolio construction again. This is not financial advice, but a discussion on portfolio construction in a world that “rules” are enforced in a discretionary manner. The target audience for this is allocators and portfolio managers, not retail investors - so consider this a wealth warning. This is a paid post - but I am adding in a “try for free for 7 days” feature for anyone interested in having a look.

The full video is for paid subscribers

Capital Flows and Asset Markets
Authors
Russell Clark