March is in the books which means Q1 is done… and what a quarter it was. Tim turned 37 (in all fairness, he looks younger now than when he worked in M&A several years ago), Manuel backpacked part of South America, and Jacob and Roger are working harder than they ever have with everything that’s happening at the Macro and Geopolitical level.
We’re sensing general fatigue around war headlines, hawkish talks, higher prices, and the risk of an economic recession down the line, which is why we write these monthly recaps - to put in one place the most important themes we've covered without adding to the noise. To be honest (and my honesty is as biased as it gets), this was an outstanding month of content.
If you're a regular reader, you know that I usually flag the one Update you should definitely read if you only have time for one article, but for the month of March, that’s simply too hard of a task. I suggest you make time for at least our Geopolitics and Markets Update - they’re both quite timely.
Geopolitics
Jacob’s The Geopolitics of Food is a great starting point to get a sense of why the current war in Europe is a global issue. Whilst it’s a touch longer than usual (for a good reason), in it he walks us through the history of our agricultural system, he highlights how we already produce enough food to feed everyone (but somehow waste 40% of it), and clarifies why the current food supply chain is at risk given possible disruptions of the fertilizer and grain markets.
The importance of this piece cannot be overstated as the availability of food might just be the most significant tail risk of the Russia-Ukraine war.
Markets
Roger’s latest Update is another outstanding (and quite technical) article that covers a widely discussed thematic, but with insights that you don’t tend to hear in traditional financial media outlets.
- Whilst many market participants usually make a ton of ‘recession worries’ noise when the Yield Curve inverts, Roger argues that what actually matters is not the inversion, but the re-steepening after the Yield Curve inverts.
- The Yield Curve is far away from a re-steepening, meaning that, if we were to just focus on what the Yield Curve is telling us, we’re likely months if not years away from a recession.
- Regardless, Roger makes the case that the Yield Curve has become a somewhat obsolete indicator and that you should instead focus on higher prices. We quote:
- “Over the last 50 years, every time we had this level of inflation (or higher), the economy was about to enter or was already in a recession (except for the pandemic recession of 2020).”
Editorial
I wrote an ad-hoc piece on our thoughts around how the Weaponization of Money and Finance has increased confiscation risks globally.
We feel that the way many governments in the West have behaved in recent months (from the truck drivers' protest in Canada to Western countries seizing assets of Russian oligarchs) is setting a dangerous precedent against the true value of private property, and all things being equal (disclaimer: they never are) this should boost the investment case of Gold and Bitcoin. Yes, you can actually believe in both…
Charts
Our signature Charts of the Month covers Gas Shortages, Oil Exports, LatAm VC Investments, Sector Returns, GBTC Conversion, Impact vs ESG, and the Foo…
A mandatory read if you, like me, love Tim’s energy rants, this time away from nuclear and into the White House’s management of the Strategic Petroleum Reserve to desperately get some votes ahead of the midterms. Classic Joe.
Impact
Whilst many of you might not know this (I certainly didn’t), construction and demolition industries are Europe's largest sources of waste.
If you’re a private investor and have an interest in Impact opportunities, make sure you read Manuel’s deep dive on the circular construction investment case. This is serious original work that I doubt you’ll find anywhere else.
Wishing you a healthy Q2!
