Spy’s invitation to the two big events of next week, appear to have been delayed in the post. On Monday, Trump gets to become president again with the great and the good bowing and scraping at his feet like Joseph’s brothers to pharaoh in ancient Egypt. Many attending the inauguration will drain the last glass of Champagne and dash for their private jets to fly to the World Economic Forum in Davos to hobnob in the freezing cold with policy makers, captains of industry, asset managers, bankers, politicians and assorted civic society hoping to set a positive agenda for the year ahead. No matter how many lively debates take place in the pristine white Swiss snow, Spy can’t help but think the running for 2025 will be decided in the White House.
It was the astronaut Buzz Aldrin, the second man to walk on the moon, who quipped, “Nobody cares about the bronze or silver medals.” That may be true, but for those who like silver and the miners that dig it out of the ground, Sprott Asset Management has an ETF just for you. The Sprott Silver Miners & Physical Silver ETF (SLVR) aims to match the performance of the Nasdaq Sprott Silver Miners Index and is a pure silver play – only silver miners and the metal itself, wrapped up in one handy package. For anyone who associates silver with an old family cabinet of dusty heirlooms, it is worth noting that hardly any modern tech does not have some silver in it and the metal is a key for the green industry, too.
Hat tip to Eastspring for getting into the spirit of the impending Year of The Snake with some witty serpentine-ish advice for investors. The entire list is here but Spy rather enjoyed this comparison of the noise of the market to the deceptive practises of the snake charmer. “Beware the snake charmer. While the charmer hypnotises with music and rhythmic movements, avoid being distracted by market noise and stay focused on the market’s longer-term fundamentals.” And, perhaps even more wisely, “Be open to new opportunities, just as snakes shed their skins to grow. Last year’s equity market laggards – Asia and the emerging markets – may offer greater upside potential in 2025.”
Managers have been peering into their crystal balls for glimpses of what the year ahead may hold. The contrarian in Spy appreciated this from Janus Henderson’s Tom O’Hara, “In my view, the single most underappreciated risk for European equities is upside risk. The downside risks have been well and truly scrutinised, with the simplistic conclusion being that Trump Tariffs = bad news for the export heavy European market. What this analysis is missing is that a large portion of those revenues are either in services or local-to-local…We have seen a big, big disconnect between the performance of US equities and European equities and that is why we see risk on the upside rather than downside.” Fair enough.
“We are smart enough to invent AI, dumb enough to need it and so stupid we can’t figure out if we did the right thing” said comedian, Jerry Seinfeld. Goldman Sachs seems to know the answer: the Wall Street giant, now has a staggering 11,000 engineers in its 46,000 staff and many are working on AI. For example, the job of drafting an S1 – which is the initial registration prospectus for an IPO – used to take, say, a six-person team about two weeks, but that job can now be 95 per cent done by Al in a few minutes, according to CEO David Solomon as reportedin theFT. According to him, “The last five per cent now matters because the rest is now a commodity.”
As corporations, universities and other institutions rush to remove their overzealous diversity equity and inclusion (DEI) policies and departments, built up over the last decade, in the face of Trump’s impending presidency, one manager has gone even further. James Fishback, the chief executive of Azoria Partners, announced a new anti-woke and supposedly meritocratic investment strategy, the Azoria 500 Meritocracy ETF. It will mirror the S&P 500 index except in one regard: it will not include firms that use diversity quotas in team hiring and staff promotions. Example firms mentioned by Fishback include Starbucks and Nike, which he claims are holding back their performance due to “a lack of meritocracy”. This fanciful idea may sound good to the MAGA crowd, but in Spy’s experience these sorts of political thematics seldom deliver in the medium, let alone long-term.
The Bitcoin crowd, enjoying the token above $100,000 (again), are licking their lips. As Trump shows more and more enthusiasm for crypto, the incoming US Secretary of the Treasury, Scott Bessent, said this week, “I see no need for the US to have a central bank digital currency.” This is rather bullish short-hand for, “the government is not going to try and compete with existing alt-coins, so fill your boots”.
Spy spotted this mug in a meeting recently. He would imagine there are a fair number of bosses out there who wish it could be their real attitude.
Spy’s quote of the week is from Ray Dalio, founder of Bridgwater Associates “If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.” Ah, there’s the rub.
Until next week…
