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The FSA Spy market buzz – 22 December 2023

The year end wrap; Happy Christmas Season; What Can Taylor Swift tell us about the markets and not much more.

The year of 2023 is winding up. This week, Spy seems to have done nothing but speak to people at airports on route to travel elsewhere or listened to voicemails from people saying they have left the office for the year. Indeed, Spy’s own colleagues have been drifting off as the holidays arrive. The entire Fund Selector Asia team, wishes you, our dear reader, a blessed and merry Christmas and a very prosperous New Year. We want to thank you for your support not just in reading our articles but in supporting our conferences, events and awards during, what has been, a challenging year.

As we wrap up the year, there is one image that Spy came across that seems to sum up the state of the global markets and so many industries so very well. This was spotted at a news and magazine store in the United States. This rack of magazines, which promised “Magazines for Every Interest” certainly had a variety of titles. Yet just one subject dominated: global pop superstar, Taylor Swift. Henry Ford might have put it, “You can read anything you like, as long as it is about Taylor Swift.” Spy senses, in this image, a kind of metaphor for the world. The winners accrue even more of the spoils than ever before. The second-bests get hardly a mention.

In the stock markets, we speak of the magnificent seven and the other 493 companies don’t even get a look in. In the curious world of Crypto speculation, there is Bitcoin and the rest are a distant second. The very largest wealth managers accrue even more assets, no matter how shoddy their performance may be in certain areas. A handful of funds take the lion’s share of flows in any one market as a theme prevails. It is certainly true that in a tech-dominated world, in almost every niche, there tends to be a single winner with most other players picking up a tiny market share.

It would be easy to blame social media for this phenomenon, with the extraordinary network effects these services provide. There is of course a grain of truth in this. With billions of people sharing the same content, it is hardly a surprise that a few ideas, people, services and products get outsized attention. But we can also blame ourselves for sitting in a comfort zone too. Whether this domination is a good thing, is another matter entirely. Spy strongly suspects not. Over-concentration is seldom ideal for investors or society at large.

Therefore, Spy has a wish for the upcoming year of 2024. Spy is hoping for some fragmentation, some differentiation, some experimentation and the breakthrough of new ideas, services, products, funds and more from firms and people we have not yet heard of. It might be a tough ask, a forlorn hope even – but like wishing for peace on earth at this time of year, at least worth doing so. The world is a far more interesting place if we don’t all wear the same clothes, listen to the same music, eat in the same restaurants, invest in the same stocks and for that matter buy the same funds. And so, Spy’s Christmas Wish is that we all think a little differently in 2024. If you put one thing on your New Year’s resolution list, perhaps it can be: I will try something different this year.

Now, forgive Spy, he needs to go, he has some Taylor Swift concert tickets to buy to keep his kids, nephew and niece happy.

Until the New year…

Part of the Mark Allen Group.