1) What distortions does the intervention of non-market players in the Asian foreign exchange markets engender? 2) Are the distortions abating? Or accelerating? 3) How long can those distortions last? 4) If/when the adjustment comes, what assets will be most at risk? Of all these questions, the last one is probably the most important. As we never tire of writing, money management is often more about avoiding the assets that implode, and diversifying amongst the rest, than about picking outsized winners. While it may be tempting to adopt a very defensive posture in the face of such blatant distortion, there are many reasons to believe that the current distortions may last and that the overall positive growth environment will continue for the coming years.” It would be useful to check up on how the funds managed by Gavekal, using their macro-economic research, have performed over the relevant periods. Push comes to shove, we like to ‘marry’ up tangible numbers (ie performance figures) with research & commentary. No reason to think their’s hasn’t measured up, although one might think more would have been heard about performance if they had blown the proverbial lights out. On macro insight, and an ability to articulate complex ideas with originality, they have few peers, in our view.
