Capital Flows and Asset Markets

The reason I was known at the most bearish fund manager on the planet back in the day, was that I ran the emerging market bull market all the way up from 2002 to 2007, and was pretty sure emerging markets were going to be a huge waste of time going forward. This view was correct as MSCI Emerging Markets has only recently surpassed the highs of 2007nearly 20 year later. Are Emerging Markets worth c...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com As mentioned in my last post, Eurohedge nominations often happen at inflection points in the market for me. So the recent nomination, has made me nervous that my theory that we are in a world of rising cost of capital could be played out, and it is back to deflation trades. On top of this, an investor I respect wro...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com I am bearish bonds, and I have built a portfolio around the idea that we will have rising inflation, rising yields and a rising cost of capital. The fund has had a good move last year, and a good move this year. So the question that has to be asked, is it done? Firstly, in my experience, Eurohedge awards can mark t...

I am surprised by this. Performance has been good - but not that good. My nomination probably comes from maybe not that many funds launched last year or I have a great sharp ratio having not had a down month last year. Two other funds have been nominated. Hunters Moon website says they specialise in financial stocks - so should have done well. Orgueil is run by former colleagues at Horseman, Steph...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com The Nikkei has been on an absolute tear over the last year or so. I don’t have many longs, but over half of them have been in Japan.

A few years ago, I looked at the rise of populism as the rise of “pro-labour” politics. I saw the return of industry policy, tariffs, unions and fiscal spend as all designed to raise the share of wealth going to workers and to reduce the share going to the owners of capital. To me it meant inflation would be entrenched, UNLESS, central banks acted to tighten monetary policy. So I put on a long gol...

I have like gold as a part of a pair trade - long gold short long dated treasuries, or GLD/TLT (using the ETFs codes that capture this trade). GLD/TLT has been a great trade, but I am old enough to know that nothing lasts forever, so have to wonder if we are near the end on this trade? I did manage to create a very long term GLD/TLT charts, which suggest we still have a ways to go. Clearly, GLD/TL...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com I have been sceptical about the AI trade. The main reason was that pricing for AI chips looked so out of whack for pricing for other chips, my assumption was that eventually supply would overwhelm demand and pricing would fall. I looked at TSMC pricing history, and thought we were similar to the dot com bubble. In...

Korean VIX is not your father’s VIX. Typically, VIX spikes when markets are falling - as people then rush to buy insurance. This was the case in 2008 , 2011 and 2020. If I was told KOSPI VIX was 47, I assume the market had fallen apart. The truth however is that the Kospi 200 (which is used to price VIX) has more than doubled over the past 6,7 months. If the market is going up, then why is the KOS...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com Sadly, I am going to have to change the format of the portfolio review. Previously paying subscribers could not only see my positions, but also the weightings of those positions. I now have enough external investors to make this untenable. For those that are looking for more timely updates on positions and markets,...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com I hate making money from being long gold. When I was bearish China back in the day, and running net short, a lot of my investors were also long gold. I told them it was a bad idea, but they held on to their gold and gold miners and got smoked. They were not quite Smeagol/Gollum - but they were close. Here I am “Sme...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com One of the hardest things to do as investor is knowing whether or not to chase a trade. Ever since gold broke higher in 2024, if you have been waiting for it to get back to its 200 MDA to buy gold, then you would not have bought any. In the move from USD 3,300 to USD 5,080 is has not even touched the 50MDA. I have...

Passive investing gets a lot of heat. The Economist has a recent article talking about the potentially distorting features of passive investing . I also know that Michael W. Green has written about the problems with passive on multiple occasions. Don’t get me wrong, I think there are some big problem with index and passive investing. One of them fits in with my personal “bete noire” of clearinghou...

I am generally an upbeat guy, but this morning I woke up and felt down for some reason. When I feel down, I don’t try and cheer myself up, I lean into it, I wallow until I hate it so much, I drive myself to live again. I feel like writing about death and loss, so I shall write on bonds. And as I write, and wallow, I shall listen to sad songs. First up is “Richter: On The Nature Of Daylight” . I sh...

I have thought fast food restaurant chains were a short for a while now. Basically three reasons: 1 - Rising costs, particularly labour would put pressure on profitability. 2 - Rising interest rates would pressurise indebted franchisees, leading to profitability problems for the franchisors 3 - Ozempic and other weight loss drugs were reducing demand from “big eaters”. I am still bearish on fast f...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com Before I talk about market action being straight from the “pro-labour” handbook, a bit of housekeeping. First, I have revamped the Brumby Capital website - go take a look. Secondly, I am now on Slice , where I do quick posts on markets every day. This is aimed more at the “trading community” - and I am offering a 6...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com However you cut it, the S&P 500 is an expensive market these days. The entire market trades at 3.4. times sales. And on a Net Worth to GDP, we are also pushing back at peak levels. A lot of this rerating has been driven by the tech sector. Nvidia which traded at 1 times EV/Sales as recently as 2014, now remain abov...

When I was younger, I used to do a lot more “trading”. Trading for me is when you have no particular long term view, but you have a conviction that its going to have a big move in the short term. 90 to 95% of what you read on Substack or Twitter would fall into the trading perspective in my view. If you are using technical analysis, you are a trader. If you are thematic investor, you are trader. T...

As mentioned in a previous post, one analyst I always make time to read, and generally want to be positioned the same way as is Chris Woods. A subscriber helpfully pointed out that he does indeed publish on Substack - and he has just written a piece entitled, “The US is Now One Big Bet on AI” . Most of the charts in his note should be familiar to people of a bearish disposition, but I had missed t...

I love currencies - they (used to) have a purity that was unsullied by the capriciousness of CEOs and/or Presidents. They used to act in predictable ways, and given the two sided nature of currencies, you did not need to take a view on whether something would be “good” or “bad”, it just needed to be “better” or “worse” than the other side of the currency pair. A good example was the Korean Won/Jap...

I try not to listen too much to President Trump because he clearly changes his message depending on who he is talking to. Plainly his objective is always to win over who ever he is talking to rather than present a coherent message to everyone. I think a better way of working out his game plan is too look at what he does, and then try and piece together some logic from that to help guide future for...

I met my wife in Japan over 30 years ago. We were both exchange students to Kansai University in Osaka in the 1990s. We were only ever friends in Japan, but when I moved to London in 2002, we met up again, and started dating in 2003 and have been together ever since. This year will be 20 years since we married. We had always talked about taking our two boys to Japan to see where we met, and with o...

This is a free preview of a paid episode. To hear more, visit www.russell-clark.com December was one of those weird months, where my individual stock positions suggested wild markets, but the MSCI World only rose 0.73%. Long book did okay, and the short book okay, meaning we made money for the month, despite still running a net flat book.

For decades, the road map to economic success was pretty clear. Reduce tariffs, allow the free movement of capital, enforce the rule of law, and have governments run balanced budgets to get inflation and interest rates down. The pinnacle of this type of economic management was the EU and its enlargement process - where it would allow European nations to join the EU if they met all of these require...

One of the recurring themes from armchair macro strategists (armchair in this case means they just comment - they don’t actually do anything) is that the current rise of populist right has everything to do with income inequality. Its a powerful argument, and one I am sympathetic to. When we look back at the rise of socialism and fascism in the 1930s, we see these too were born in era of high incom...