The actor, Robin Williams, once quipped that “You know, cocaine is God’s way of saying you’re making too damn much money.” The updated, clean living puritanical 2020s equivalent might be an art habit. Spy was invited to visit a pre-opening of Art Basel Hong Kong last night, replete with chilled champagne and fawning sycophants. There is no doubt there is some decent art on offer but an extraordinary amount of tatty nonsense, too. Only people with too much money could possibly think it is worth hanging some of the dreary, downright dull pieces available on their walls. Still, Spy will freely admit it is not a crime, and art is very much in the eye of the beholder. It was also good to see some of the old Hong Kong buzz truly back in action.
Have you noticed that everything these days needs a superlative? A movie star is not just cool, they are ultra cool. It is not just a trend; it is a megatrend. (Perhaps Spy should style himself a Super Spy; James Bond be damned.) Spy was, therefore, not too surprised to see a new equity ETF that is not just “enhanced”, but “research enhanced”. What did surprise was the name behind it. J.P. Morgan Asset Management has listed the U.S. Research Enhanced Large Cap ETF (Ticker: JUSA) in New York. It may come as a surprise to Spy’s readers that research is some form of “enhancement”. Surely, giant asset managers’ bread and butter is doing research? This is an old-fashioned large cap fund, which is trying its best to beat the S&P 500 by investing in just the best bits, a notoriously difficult game.
Talking of ETFs, Thailand is allowing its local investors to get in on the leveraged and inverse ETF act. According to an announcement by the Thai Securities and Exchange Commission, it will now permit asset managers to introduce leveraged and inverse ETFs with a maximum leverage of 2x their benchmark performance. As Thailand currently only has eleven ETFs listed on the domestic stock market, Spy is rather sure that this additional variety will go down rather well with the local investors.
Spy was impressed to see a report out by Natixis Investment Management measuring the growth of global wealth management assets around the world “The growth engine has run strong for wealth managers over the past five years as assets under management grew by 20% globally. As a result, the advisory industry was responsible for the stewardship of an estimated $159tn globally in 2024. Assets are estimated to grow another 10% by the end of the decade to reach $178trn in 2029.” The US utterly dominates with the UK, France and Germany taking the next three slots. Spy was surprised to not see Singapore in the top ten and wondered if that was just coy reporting by the secretive family offices based there?
Is being a billionaire as rare or as special as it used to be? Not according to China-based Hurun Report, reckons Spy. There are now 3,442 billionaires across the world with 870 of those in the US, the leading country. China is second with 823. The report estimates that there are a further 2,000 hidden billionaires, mostly in the Middle East, who are very good at masking their true wealth. The average age of the billionaires is 66, which means there is still a little hope for Spy. There are 129 who are under the age of 40, 75 of whom have made it themselves.
If you spend a little too long on social media, especially LinkedIn, apart from one’s brain turning softer than a congee supper, it is likely one will have to endure some extraordinary idiocy. Spy has seen numerous articles from financial advisers claiming we are “close to the end of American exceptionalism”, especially stock market exceptionalism, in their wisdom. Why? Well, apparently a little bounce in beaten down European stocks, combined with a healthy sell-off in overvalued US tech stocks, means the “end is nigh” for Uncle Sam. For goodness sake, American enterprise and America itself has been exceptional for two centuries; one wobbly quarter does not the end of an epoch make. See the chart above as a little reminder.
How do you truly disappoint the market? Well, you could start doing things that have nothing to do with your business. Gamestop, the notorious meme stock of the HODL crowd, announced yesterday that is raising more than $1.3bn, by selling convertible senior notes, to invest in various things, including hoarding Bitcoin. The shares immediately plunged 25%. “Investors” need a strong stomach for that one.
Spy’s quote of the week comes from one of America’s greatest industrialists, Andrew Carnegie. “I believe the true road to preeminent success in any line is to make yourself master in that line. I have no faith in the policy of scattering one’s resources, and in my experience, I have rarely, if ever, met a man who achieved pre-eminence in money-making, certainly never one in manufacturing, who was interested in many concerns. The men who have succeeded are men who have chosen one line and stuck to it.” It is very hard to dispute this.
Until next week…
