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Economic Regime Shift
Didier Darcet
14 May 2026
The conflict in the Middle East is set to have far-reaching implications for tactical portfolio management. Not because markets have suffered meaningful direct losses, but because a major turning point in the global cycle is now forcing investors to reposition themselves, says Didier.
Gavekal-IS
Chinese Impressions
Didier Darcet
7 May 2026
Didier says that he should have gone to China years ago but, to his embarrassment, he only recently returned from a first visit. In this note, he gives his first impressions and explains how they influence his long-term investment view.
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Understanding Asset Price Trajectories (Part II)
In Didier’s last note, he challenged the notion that markets are generally well-behaved. The famous Bell Curve is thick at the base and scarred by violent, recurring shocks. This dynamic reflects randomness, but also memory. And not of direction, but of shock intensity. This week, he tackles a second flaw: the Bell Curve does not just stretch, it tilts. This, he argues, represents another crack in the foundations of statistical finance.
Understanding Asset Price Trajectories (Part I)
The first instinct for any financier, says Didier, should be to understand the trajectory of asset prices. Yet despite the analytical progress made in statistical finance over the last century, markets still behave as if this insight is wrapped in a quantum haze. In the first of a short series of notes on the topic, Didier offers up some non-technical insights.
The Neutral Portfolio
Facing increased volatility across asset classes as a result of the Iran war, money managers may want to take risk off the table by shifting to a neutral portfolio. But what is a truly neutral portfolio? Didier assesses the options and comes up with a clear winner.
The Market’s Take On Global Trade
It goes without saying that the closure of the Strait of Hormuz is a big deal for the global economy. However, markets have not reacted with the apocalyptic pricing response one might have expected. "Why so?" asks Didier. He seeks to answer this question using a usually reliable market-based signal for the global economic cycle involving the Swiss and Swedish equity markets.
What To Do? Stay Put
Sound portfolio management does not rely on prediction, because the world is fundamentally uncertain, says Didier. Worse still, forecasts follow a brutal law: the more precise they become, the more likely they are to be wrong. He applies this insight to the dilemma faced by portfolio managers at the current moment because of confused signaling associated with the Iran war.
Rare Cases Of Risk Asymmetry
The broad market shock induced by the Iran War has thus far been contained, says Didier. In this piece, he seeks insights from oil-market pricing to test if that reaction is justified. By looking at the dynamics in the spot and futures markets for crude, he concludes that investors are being rational and should keep the faith with risk assets.