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Insight - Making Sense of the Narrative


We like to look for nominative determinism where we can find it, so to see that the over-leveraged US Hedge Fund that was forced to aggressively de-leverage on Friday was called ArchEgos was too good to miss.

We have noted on many occasions the seemingly unstoppable trend towards a ‘green’ takeover of the western economy consistent with a centralisation of the allocation of capital according to the UN sustainability agenda.

We live in a world in which we are increasingly ‘given the opinions we are supposed to hold’. One antidote to this is to apply the logic of received opinion number one to situation number two. This results in some interesting, if sometimes uncomfortable, results, in effect, rather awkward thought experiments or ATEs as we shall call them.

Almost a year ago when we wrote Spring but not sprung we were worried that the government was too risk averse, but never thought we would still be in lockdown as a second spring arrives with most of the West still ordered to remain at home.

We like to think of the market moving in a variety of ‘herds’, with the opportunities for the biggest herd, the long term investor, being presented by the behaviours of the other two, the Asset Allocators and the short term noise traders.