“The real problem is that too many people learned the wrong lesson from legendary economist and central banker, John Maynard Keynes”, a high-growth equity fund manager said to Spy over a bottle of R. Lopez de Heredia Vina Tondonia Reserva Rioja. “They all remember his, ‘In the long run, we are all dead’ quip. But his best line, was ‘The difficulty lies not so much in developing new ideas, as in escaping from old ones’.” His argument was that all too few people have the imagination to comprehend a different future, when the old paradigm has decisively shifted. Therefore, people don’t believe AI will take their job, for example, because there are so many jobs around. He added, by the third glass, “Horses, in 1900, could not believe in a horse-free future, despite seeing cars beginning to clog up the carriageways.”
Costs for funds have been falling for years. Taking a peek at Singapore’s CPF fund tables, Spy gets the impression that not every manager got the memo. There are currently 120 mutual funds available to Singapore CPF investors; it is not uncommon to find strategies in the list with an expense ratio of 1.75%. For examples, JP Morgan Asia Growth or Natixis Global Equity. Of the 120 funds listed only 89 currently have an expense ratio published against their name and the average TER is a rather punchy 1.235%. That said, the Schroder International Selection Fund – Global Equity Alpha USD has a tiny expense ratio of a mere 0.01%. Someone there, certainly did get the memo.
Does one trust online social media’s opinion of the state of world trade, or real companies? Spy tips his hat to Jupiter who have been out there speaking to firms directly and it is certainly not all doom and gloom. “We regularly meet with companies, and the management we have spoken to recently have been fairly upbeat, even those exposed to tariffs. In many cases, these companies are selling products with very few competitors so that their customers do not have alternative suppliers to turn to. This is true of Asian technology companies who supply the US technology giants known as the Magnificent Seven (including Apple, Microsoft, Alphabet).” Spy, for one, has plenty of faith that Asia’s entrepreneurs are highly adaptable.
China’s waving the green flag like an overzealous race starter, letting Greater Bay Area companies already listed on the Hong Kong Stock Exchange list on the Shenzhen Stock Exchange, too . This move is all about opening the mainland’s stock market gates a little wider and knitting the region’s financial ties tighter than a panda’s grip on a stick of bamboo. The grand plan, tucked away in the snappily titled Opinions on Further Advancing Shenzhen’s Comprehensive Pilot Reforms to Deepen Reform and Innovation and Expand Opening-Up, was dreamed up in August 2024 but only became public on Tuesday, courtesy of the State Council and the Communist Party Central Committee. The Greater Bay dream marches on.
Despite the hype around space, there has been very little real action on the stock market allowing people to take Star Wars off their children’s duvet covers and into their portfolios. That changed this week with the IPO of Voyager Technologies which had a very impressive debut pop, nearly doubling in price. The firm raised $382.8m from the sale of 12.35 million shares. Voyager’s main client is NASA and is part of a JV with Airbus SE, Mitsubishi Corp and MDA Space to build up the Starlab commercial space station. If that is not exciting enough, they have a strategic partnership with Palantir, the AI implementation darling. It all sounds very Tony Stark, to Spy.
What was the first global currency? The Roman denarii springs to mind but that was only European and could hardly fit the “global” title. The Spanish Dollar between the 16th and 18th century meets the term better. Most trading ports, around the world, accepted it for settlement. In the nineteenth century, Britain had its turn. With its grand empire and dominant navy, 60% of global trade was settled in pounds towards the end of the 1800s. The twentieth century has been America’s turn but even King Dollar is beginning to feel the afternoon sun, if not quite the golden colours of sunset, just yet. When even mighty JP Morgan is warning its investors, “The primacy of the dollar seems durable, but at the margin, investors may be shifting their perceptions of the dollar’s value. Nearly 70% of investors surveyed think the dollar is ‘overvalued’” Time to think even harder about diversification.
It is hard to argue with this cartoon, which rather sums up half the fund presentations Spy has ever had to sit through. Remember the mantra, “It will start in the bottom left and finish at the top right. Repeat.”
Spy’s quote of the week comes from an anonymous person, who clearly does not buy all the AI hype: “AI is a positive feedback manure multiplier.”
Until next week…
