Email of the day on secular change and the Autonomies
Dear Eoin, When you started the Corporate Autonomies Fund it was based on the correct hypothesis that globalisation was the future trend and therefore it was wise to invest in companies that had, or would have, a global footprint. Now it seems that there is a trend away from globalisation and towards the repatriation of national production. What does this mean for the fund and for our investment strategy?
Thanks for consequential audio Friday in both content and timing. Overlaying today with 2007-09 is key at this time.
Your focus on the 1980 - 2022 bull market in bonds I found spot on and would like a little more commentary on that. The bubbles of housing (2007) and technology (2000) have been put away but Japan (1990) has not. We've punctured a rather big bubble. How do you see this playing out moving forward as far as global U.S. Treasury ownership is concerned in scope (range in long rates) and timing (years to repair damage) considering how many bonds are and will stay underwater if not sold? It took U.S. stocks 25 years to unwind the 1929 bubble and Japan is 33 and counting.
Considering the bond bubble is arguably the mother of all bubbles this side of 1929 and 1980 I would find it helpful to at least make a run at how it ranks in the standings.
Thank you for these topical questions which should be of interest to other subscribers. The basis for the bull trend, which the Autonomies benefit from, was based on a confluence of factors. The assumptions we made were:
1. The rise of the global consumer, driven by economic growth, adoption of capitalism and demographic sweet spots would boost demand for just about everything.
2. The shale revolution would allow the USA to become energy independent and a lengthy contraction in energy prices would boost demand and economic potential.
3. The march of technological innovation would create efficiencies that drive profitability for both creators and consumers.
4. The best hedge against inflation is companies that have growing business and solid competitive edges.
The list of Autonomies was compiled with these characteristics in mind and picked only the most attractive companies from each sector that offered exposure to these themes. In many respects it is a list compiled of oligarchies which dominate specific niche businesses.
Let’s consider the main questions everyone is considering today.Click HERE to subscribe to Fuller Treacy Money Back to top