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Israel, Iran And Portfolio Management
Didier Darcet
18 Jun 2025
The prospect of full-scale war between Israel and Iran raises the following three critical questions for portfolio managers, says Didier: (i) Is there a serious risk of an immediate market crash? (ii) Over the coming months, could the conflict derail the global economy? (iii) In the very short term, what should investors do?
Gavekal-IS
A Meeting Of Minds: Wicksell And Gave
Didier Darcet
12 Jun 2025
You would have to be seriously distracted to work alongside Charles Gave and not get drawn into two cornerstones of his economic thinking: the Four Quadrants, which he first introduced in 1978, and the interest rate theory of Swedish economist Knut Wicksell. Since Didier is in such a situation, he reviews these core features of the Gavekal analytical framework in the context of the current growth situation and interest rate settings.
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The Market Timeframe
The US government has rattled global markets with its stream of on-again, off-again tariff announcements. But it is not the policies themselves that are stirring reaction—it is more the intensity of the rhetoric behind them. In such an environment, Didier asks whether investment portfolios can still be managed with rationality, rather than reflex.
The Stock Markets Inside The Valeriepieris Circle
The Valeriepieris Circle is an imaginary 2,500-mile-radius area centered in East Asia, famously containing more than half the world’s population and an outsized share of its geopolitical weight. Charles has written on this topic in recent months and indeed addressed it earlier today in our Daily note. In this report, Didier uses to concept to ask whether there is a challenger region to the US in terms of equity market performance.
BitBonds
Didier takes a magnifying glass to proposals that the US should issue Bitcoin-Enhanced Treasury Bonds, or BitBonds. He finds these are akin to structured products sold by banks, in which the gains accrue disproportionately to the issuer.
The Ant And The Grasshopper
Like the grasshopper in Aesop’s fable, the US has long lived in the moment, while the more diligent ants have forgone consumption to accumulate assets. The result, writes Didier, is today’s wildly skewed international investment positions. Exchange rates provide a relatively painless mechanism of adjustment.
A Quant View On The Drama
The upending of markets since Donald Trump announced his tariff plan on April 2 has caused investors to question some of their most basic assumptions. Didier is not convinced that everything has changed for investors and in this piece, he offers a dispassionate “quant” take on the macroeconomic situation.
The Principle Of Reality In Finance
The essence of good analysis is to acknowledge what we see but question what we do not, says Didier. In this piece, he considers a bunch of worrying phenomenon in global markets from the US-induced trade war to rising equity market volatility, but asks what other factors should be considered when making judgements on these developments.