GaveKal: Our Brave New World
I came across the book Our Brave New World published by the partners at GaveKal Research; downloadable here. It talks about how companies today are more efficient with their use of capital and labor than they have ever been in the past - and how this translates to good times ahead for financial markets.
We have witnessed the birth of a new breed of company that we shall call the ‘platform company’. Platform companies know where the clients are and what they want and where the producers are. Platform companies then simply organise the ordering by the clients and the delivery by the producers (and the placing of their logo on the product just before delivery).
Platform companies keep the high added-value parts of research, development, treasury and marketing in-house, and farm out all the rest to external producers. Typical examples include Dell, Wal-Mart, IKEA, Hennes & Mauritz, Li & Fung and many others.
We would therefore argue that a private investor should build his portfolio around four key asset classes:
- Cash or Gold,
- Emerging Markets or Commodities,
- Platform Companies,
- High Quality Government Bonds.
An interview with Louis Gave via Financial Sense:
Also check out Brave New World Or Bust, where Marc Faber debates with Louis Gave on the above concepts.
Finally, here’s a recent presentation by one of the authors, Anatole (Trend & Cycle: When They Diverge, Watch Out) Kaletsky. The slides cover the state of global economies, financial markets, and where they might be headed.
Related Posts: