ESG is a massive topic; in fact, so big that it is hard to give it justice in the approximately 1,500 words I have at my disposal in these monthly letters. Consequently, I have decided to split it over two months.

I have written this month’s Absolute Return Letter with a heavy heart. I don’t take any pleasure from other people’s misery.

Over the next few pages, I will argue that consumer price inflation (CPI), which is now falling rapidly across the OECD, will soon return to levels that central bankers are comfortable with.

As some of you will be aware, we have recently changed our business model, following an approach from a client who encouraged us to invest directly in listed securities on the back of the same seven megatrends that have formed the backbone of the fund investments we have made for years.

Recently, I was asked by a client what my return expectations are for the next three years.

Today, I am going to bring a new technology, and a new company, to your attention – a company in control of a technology so powerful that lithium-ion batteries could soon become yesterday’s story.

Things are not exactly going China’s way these days. One incident after the other has led to a virtual collapse of international investments in China, but that could potentially be the more benign outcome of the ongoing Chinese debt crisis.

Humanity is sitting on a time bomb.

Economic fundamentals are lining up for a return of QE. Yes, inflation is still on the high side but falling so rapidly that at least some central banks will be willing to take action before inflation is back to 2%.

A tricky situation is unfolding, making it rather difficult for the Federal Reserve Bank to honour earlier promises to gradually ease off in its ongoing fight against inflation.

"We forgot that war is history’s favourite driver of inflation." -Niall Ferguson

I chose the topic for this month’s Absolute Return Letter during the Christmas break.

2022 wasn’t the easiest of years to handle for investors.

Earlier this year, we added “Globalisation 2.0” to our list of megatrends – trends that are virtually set in stone and so all-encompassing that they will have a profound effect on financial markets in the years to come.

In August 1979, President Carter appointed Paul Volcker as Chaiman of the Federal Reserve.

“If the Fed loses its independence, the age of magic money could end in catastrophe”.

We have a long and proud history of investing thematically and believe you can remove a great deal of volatility in your portfolio, if you do so.

"Without Italy, there is no Europe, but outside of Europe, there is even less Italy." -Mario Draghi

Sri Lanka is in turmoil.

It took me a long, long time to write The End of Indexing.

Gold and silver is money. Everything else is credit.

Is gold the answer?

Welcome to the new, slimmer format of the Absolute Return Letter.

This month’s Absolute Return Letter deals with a hyper-sensitive topic.

Why commodity markets have done so exceptionally well

How to structure your portfolio when interest rates are rising.

You know society is in trouble when the Prime Minister of your country stands up and says something along the lines of “of course we can afford to take on more debt – you are old-fashioned if you think otherwise”.

There are three key drivers of financial markets - behavioural patterns, cyclical trends and structural trends. Because human attention spans are getting shorter and shorter, behavioural patterns affect financial markets more and more. That is a problem but also an opportunity set for the astute investor who is prepared to think outside-the-box.

Oil prices have been remarkably strong more recently, defying our (very) long-term prediction that fossil fuel prices will go to $0. In this month's Absolute Return Letter, we take a look at the reasons behind the recent strength and where oil prices are likely to go next.

Low-cost, high-grade coal, oil and natural gas - the backbone of the Industrial Revolution - will be a distant memory by 2050.