Gavekal-IS

Ask an asset manager why they are buying equities and there is one answer you will never hear: “Because the market is rising and everyone else is buying.” Admit it, and one’s professional reputation, along with any justification for charging fees, quickly unravels. Yet behavioral effects do not disappear just because they are inconvenient for professionals to acknowledge. Such factors shape financial markets every day. In this report, Didier asks, what today is the manager’s unspoken truth?

Some of the world’s first gold coins were minted 2,500-odd years ago in modern-day Turkey to pay the sovereign’s foreign mercenaries as he sought to counter the rising Persian Empire. Didier argues that gold’s origin story is inseparable from military spending—and that this linkage may still hold true today.

Last week, Louis Gave argued that pressure on Europe to accept a peace in Ukraine forced by Washington and Moscow threatened it with an existential crisis. In this piece. Didier looks more closely at the notion of catastrophe as it shapes nature, economics and even religion. He uses a multi-disciplinary approach to get insights relevant to those who must manage money.

Artificial intelligence is everywhere, whether whispering through Main Street or roaring across Wall Street, as evidenced by Wednesday’s Nvidia earnings release. And with its rise comes a wave of critics saying the whole thing is a bubble on the verge of bursting, threatening to take trillions in investments down with it. But is this really insight, or just another round of AI bashing, asks Didier.

Gold prices have pulled back over the last two weeks and yet the macro conditions that pushed them higher remain largely in place. In this piece, Didier assesses the fundamental case for gold through the lens of gold-miner plays.

The intrinsic value of any asset is related to the notion of either scarcity or efficiency, and sometimes both together. Didier uses this analytical framing to consider the current value proposition of the world’s most liquid asset classes— those constantly subject to price adjustment—namely government debt, publicly-listed equities and gold.