WHAT DO I NEED?

Fund management is a funny game. Every manager has a different style, but typically people think a hedge fund manager needs to have a wall of screens to be able to track all the different markets. Whenever I see a set up like this - I feel like someone is trying to represent frenetic activity as an alternative to thinking and strategy (the big car/small car analogy comes to mind).

Also most people assume you need a huge team of researchers and traders. My experience - not so much. Back when I started in 2002, and particularly in emerging markets, gathering the data on Indian or Chinese corporates would need some knowledge and patience. Economic data was also sometimes tricky to find and interpret, so you needed someone with a bit of knowledge of the world to do that for you - which is indeed what I got hired for. But these days Bloomberg pretty much collates and transforms data for you pretty easily. When I want to find all the listed options to play a certain area - I can find a listed ETF, and just go through their holdings (see below for a screen shot of the holding of EM consumer ETF - for example). For me, software really ate the fund management analyst role.

One thing to clarify - there are large fund management firms with the resources to dedicate a single analyst to a single corporate. I could never compete with that - so I don’t bother - and generally assume 99% of funds cannot compete in that way. I have generally felt that funds that claim they do 100s of company meetings generate no alpha - so I don’t see the point in paying for company access.

Even if I just want market hot takes - Bloomberg uses AI to generate reports (not always accurate) to allow me get an idea of market thoughts, and almost instantaneously.

So what do I need? Well all the short term malarkey is already covered by Bloomberg to be honest. As far as macro is concerned - the problem I find here is that I am also inundated with people wanting to sell me macro research, that basically does not work. It used to work - and I made a successful career from it - but as of today, May 6 2025 - macro has been a massive dead end trade. Maybe tomorrow it changes. We have a good test. Every macro trader and their dog has gone long Yen. Looking at CFTC data, people are as long Yen today, as they were short Yen in 2007.

I understand the logic of being long Yen. But here is where the rubber meets the road, and where I think I need some help. The problem is that trying to find someone who can do it has proven difficult, so I have ended up doing it myself. The key question is does the politics make Yen a buy? China, Japan’s largest trade partner has been hit with 120% tariffs rates - is that Yen bullish? Japan auto sector has been threatened with 25% tariffs. Is that Yen bullish? China may well invade Taiwan, is that Yen bullish? And even on a macro side, there are questions. On 12 month rolling basis, Japan is not running a trade surplus. Is that Yen bullish? This worked example shows you why I hate macro and macro thinking these days.

All of the above, would actually make more more inclined to short Yen than being long. But I would need “political analysis” here more than macro analysis. And what I find is that no-one is consistently offering good political analysis. Sometimes people get it right - but more because of constant negative or positive bias, not from actual thought or strategy (a stopped watch is right twice a day style of success). Another good example of this is Russia. Even though UK and US intelligence services were warning of a Russian invasion of Ukraine, Russian assets did not move until a few weeks before the actual invasion. This is also despite Putin publishing an essay entitled “The Historic Unity of Russian and Ukrainians” in July 2021. Shorting Russian assets then would have been a huge win.

In 2021 I started reading what the Chinese government planned for regulating Chinese tech - which then fell by 50%. This was a huge win, but I tried to work it within a macro framework, which was a fail.

It also goes without saying, that if you had been reading what Trump planned to do with tariffs, then the Liberation day massacre would have been less of a surprise.

As of today, I think that I need help with politics. Someone who can marry politics and markets - and see where the opportunities lie. I have been trying to do that myself for the last few years - but it is very hard (although I reckon I am better than most - which is why I have launched Brumby Capital). I missed the Trump deal with Saudi to flood the market - focusing more on the likely military action against Iran. But against that - my main political trade has been going gangbusters.

If you do think you can help me, then get in touch. But don’t waste my time - as I get older, time is the one resource that gets scarcer - and I don’t forgive anyone who wastes it. You have been warned and I keep a list.