New Global Macro Fund launched - TGSF Advisors

Jawad S. Mian, former CIBC and QInvest PM is starting a new global macro fund, The Good Society Fund (TGSF), see this presentation.

Themes
- Developed economy governments insolvent; burdening unemployment becoming a source for increased social and economic strain
- Process of deleveraging and global rebalancing underway
- Increased risk of geopolitical tensions and social conflict (esp. Southeast Asia, with China, the US and Russia battling over influence)
- Central banks tradition of selling off gold reversed to buying in past years

Investment Theses
- Iraqi equities "the investment opportunity of the decade" (using USD-denominated RS ISX)
- Gold and silver miners (XAU) up for relative gains against gold price
- Silver-gold ratio to decrease to 10-15 to 1; platinum and palladium also bound for (relative) gains
- RMB bond market volume set to explode, with opportunities abound
- "Sun will shine" on Japanese exporters' stocks due to a decrease in JPY (unsustainable value gap vs. USD, GBP and KRW and reversal of japanese trade balance of the past years)
- Break-up of Eurozone with weaker countries allowed to default and opt-out inevitable

Monkeys, what do you think of his themes and theses?

Thank you
M in A

P.S.: Does anyone know (of) the founder, Mr. Mian?

 
Best Response

The first 3 themes are painfully obvious while the last one seems questionable at this point. Even if the Eurozone and IMF start leveraging their gold holdings, they're not really in a position to expand their balance sheets with hard assets right now. I don't see why the XAU trade would work any more than it has(n't) in the last 5 years.

Iraq could be a great opportunity, that's a serious deep dive if you want to do it well though. Can't be that deep of a market though. I have no opinion on the silver-gold ratio or the RMB market, save that China could become a distressed debt goldmine in the next decade.

Maybe it's they way you summed them up, but I take issue with the last two theses. The reason JPY will weaken is because of the BOJ going nuclear and nothing else. Yes, Japanese stocks should do well, but always with an FX hedge. This isn't a story of unbalances getting wound down or unsustainable value gaps, but the result of extreme financial repression.

And if his last thesis means loading up on eurozone Sov. CDS, this dude's fund won't last long because the Japanese bid will crush him.I can see two paths for the eurozone right now and default is in neither of them. Either Germany goes back to the DM and the rest of the eurozone gets to devalue, or the ECB finally caves and goes the way of the Fed/BOJ/BOE.

 

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