Two Loves (Investment Themes for the Coming Decade)

The following was written by Jawad Mian, Portfolio Manager based in Dubai. We have run some of his prior research reports in the past, and they have been both interesting and thought provoking.


Time seems to be gathering pace. Only last year I was single. Now I’m married, Kim Kardashian is pregnant and the Dow is making all-time highs. The stock market is up 11 percent for the year, roughly in line with my weight. While the market may give back some of its gains over the next few months I have no such delusions about my waist – one of the many few downsides of married life.

During the past three months, when I wasn’t helping my lovely wife in the kitchen or taking her out shampoo shopping, I would spend precious time puffing my proverbial pipe, reclining back in my fake leather chair, thinking how blessed I am. Giving up your life to be with someone for the rest of her life is a beautiful thing and only adds to my “accumulated experience and wisdom” over the years. (Source: Sonya Rehman)

I’m all about learning – doing dishes, ironing clothes, putting down the toilet seat. I quickly realized that up until this point, I was wasting my life away sitting on a prop desk taking decisions on $250 million of capital in global equity markets with my face stuffed into the screen. After twenty-nine years of traversing this world aimlessly, my life found meaning. Thank you, God. Who needs boys’ night?

Okay, enough… Breathe! I just had to get that out of my system. Now let’s move on…

I actually sat down this morning to write about my other love – markets. For those of you that know me, I have been on this strange journey to the ocean of meanings for the past few months. My mind was clouded with only one thought – to figure out the investment trends that will dominate this decade. As I get ready to launch my own little macro fund, I decided to turn away from the world so as to come back with a new understanding. You will find attached in this e-mail the result of my discoveries, “Major Themes: our macro views getting down and semi-dirty in global markets”.

Confucius famously said, “Life is really simple, but we insist on making it complicated”. At a certain level, perhaps the same can be said about investing.  Consider the following: each decade we can identify a few major themes that play out strongly in markets. If we had put our money in large-cap Dow stocks in the early 60’s and rode that trend till the end of the decade, rotating into gold during the 70’s and staying put for another 10 years, followed by a large allocation to Japanese stocks in the 80s and U.S. stocks in the 90s, and then investing in oil, gold or emerging markets during the early 2000s, we would have reaped significant financial gains without having to worry about the unemployment rate, the next election, or the latest earnings release. The fundamental factors underpinning the long-term trend over-power any short-term friction in markets. I suppose the most difficult aspect of this strategy is the psychological make-up required to stick to your convictions.

Given the extreme uncertainty that currently prevails, I have been obsessively trying to figure out the major themes that will play out over this decade. After much deliberation and thought, I believe I have found the answers. The attached document expresses those views in detail. Have a look if you’re interested. But just be kind enough to remember the wisdom of Voltaire, “Judge a man by his questions rather than his answers.”

P.S. Saniha, I love you. Please don’t make me clean the bathroom.

PDF after the jump



TGSF Advisors – Major Themes (April 2013) Copy

Jawad Mian
Two Loves, April 11, 2013

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