Moments of Zen: Investments & Trends

, Phoenix Dragon Mountain

I spent the last few weeks in a Zen temple in the Korean mountains. Sometimes its good to simplify one’s life.  Each day we woke up at 2:55am and I was in silent meditation all day until just after 9pm. The monastic life is pretty tough, especially for those who have a lot on their mind; it takes some people days if not weeks for the mind to settle a little. In fact, when one realises how much time we are ‘lost in thought’ its a real tragedy. Most of one’s thoughts are a repeat from yesterday.  New insights actually seem to come from space, stillness. And by being stuck in your head all the time one misses out on life, which is always fluid and dynamic.

An Indian sage once said that as soon as you tell a child “this is a tree”, he or she stops observing the tree.  I think when one lives in silence for some time, and if you can subdue your backseat driver, the world starts to become alive again.  Colours become more vibrant, sounds become clearer and you start to see the small interesting things; whether its a squirrel shuttling across the ground, a rare and beautiful butterfly or bees diligently doing their work. This is at the heart of zen – experiencing and connecting with life.

One thing I like to mention vis-a-vis futurism to all of my audiences is that the business of  trends and anticipation is about seeing. Its not necessarily about having more facts or knowledge than the next person. In this world of ‘excess’ information surely, the value is in seeing the patterns and having insight.  And its my experience that when one’s head it full of noise, full of strong opinion, bias; it is difficult to see clearly. And so there is a huge benefit of training the mind. One of the smartest fund manager’s on Wall St, Ray Dalio, invests an hour per day I believe in meditation.

Rather than get sucked in to the daily noise we aspire to see ahead of the pack. In the words of one of the most influential business strategists and the godfather of modern business futurism, Pierre Wack:

“I had the feeling of hunting in a pack of wolves, being the eyes of the pack, and sending signals back to the rest. Now if you see something serious, and the pack doesn’t notice it, you’d better find out — are you in front?”

It is all about seeing. Not who has more data or intellectual knowledge.

I will probably write a lot more about this in a separate article. But back to trends and investment, which is the focus of this publication.

Coming back to ‘civilisation’, I wondered has the world changed at all? It seems that the existing trends are very much in place. The people and characters might change, but these bigger forces surpass that, a little like Issac Asimov’s account of ‘psychohistory’ in the Foundation Trilogy.

On the positive side, there are the relentless developments in technology, especially with AI, life extension/biotech and the blockchain (which will revolutionise the internet). We will be posting some articles very soon on some of these. And many visionaries are very excited about the future. It is phenomenal to think that Masayoshi Sons’ recently launched Vision Fund in London will have capital equal to 20 Sequoia Capitals!On the flip side, division within societies is growing, and in the last month we had terrorist attacks around the world with high profile ones in Manchester and London. And the tug of war of centralisation vs decentralisation continues. In some ways the UK voting out of the aspiring superstate EU was an example of decentralisation, whereas Macron represents those that believe in more centralisation of power. The UK election has been interpreted (by the mainstream media) that Brits now want a soft Brexit. In the corporate sector, we see the large tech behemoths gaining more and more (centralising) power. Amazon has just acquired Whole Foods in a major transaction.

It seems to me, though, that the overriding phenomenon that will affect all of our lives short term is the shift in tectonics around the economy: the fact that asset prices are at extremes whilst central banks are removing their so-called life support. This is a key chart published by Citi showing how central banks purchases have distorted the bond markets and the all important credit spreads:

The US economy has been the bastion of strength for the world economy in my view in recent years, but there is an ever-growing gap now between the economic data (economic surprise indices) and the S&P500. On top of that Washington DC has gone on an all-out witch hunt against President Trump. Whatever you think of Trump, the result might be total paralysis and a government shutdown. One of the pillars of the stock market’s buoyancy since the election has been expectations of tax cuts and other economically-supportive measures.  There is a real risk now that we see the top of financial markets in the next 3 months with a very shaky end to 2017.  We have have the stage now set for an all-out crisis in 2018. There is a lot more data below but the TIPs market – which measures inflationary expectations – is showing that deflationary forces are manifesting again. This is perhaps rather revealing.

Source: Telegraph

Suffice to say we don’t believe that Janet Yellen when she says that contracting the Fed’s balance will be like watching paint dry!

Just some advance warning. This weeks letter is long as I have been away for a few weeks.

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