We try to see the investment world as we think it should be seen – with a fundamental investment perspective.
Economic growth continues to be weak and variable.
Central bank monetary easing to stimulate growth has taken financial markets into uncharted territory.
We believe that more and different actions will be needed, relative to the high level of rhetoric since the Great Financial Crisis.
Debt levels continue to grow and the growth is unsustainable, and deflationary pressures present a significant problem, particularly when inflation is needed to erode the extraordinarily high levels of debt.
Medium-term, the most likely environment will be economic growth that is slow and sluggish at best, coupled with inflation.
For investors, unfortunately, this will be a most difficult environment in which to preserve and grow real wealth.
Currently, equities offer extremely poor value and conventional bonds offer only modest potential returns relative to risk.
Investment with perspective will be necessary to navigate uncharted waters.
We believe that, currently, our portfolio for the core product is more different than ever from conventional investment portfolios: our equities exposure is positioned to profit from a significant fall in public equity markets; we have few if any public bonds; we have significant exposure to private debt, private equity, and private real estate opportunities with decent expected returns; we have exposure to precious metals and invest in producers; and, we have a significant allocation to alternative investments.