Price Macro Monthly | Welcome

Dear family, friends, colleagues and associates,

The world is pretty dystopian in 2020. Record high unemployment yet record high equity markets in the US. Daily protests; some about starvation, some about the right to walk one’s dog. Fox News, CNN, SABC, E-TV, twitter or Facebook, which one is fake news? We’re up to our eyeballs in content that we’ve become uncertain of the truth. Reality TV stars and comedians leading political parties. The US, the world’s biggest economy, led by its oldest President, is set to appoint an even older President in November, while its youth are on the streets. Record high debt levels yet many of those governments have negatively yielding bonds. And whether you look at my home, South Africa, or my new home, America, egregious corruption is everywhere. The US government contract to Kodak to produce pharmaceutical supplies is the latest to catch my eye.

“Take me back to normal” I hear you say, whatever that is and whenever you experienced it.


The coronavirus has given people the solitude to contemplate the madness of it all, or perhaps merely provide a focal point. The virus is a seemingly logical cause for the deep anxiety and discontent itching under our skin. But, in my opinion, very little of the current madness is caused directly by the coronavirus. The world is in challenging times and I don’t think they’re going away any time soon. This is the start of a dialogue with you to elaborate on this point, deciphering the causes of the current predicament and our response.

I’m not foolhardy or grandiose enough to think that I have the answers. The future is uncertain, and I am as fallible as the next. Despite this unpredictability and ambiguity, I know I’ve got insights to share and value to add to your life through describing the path we’ve taken to reach this point. These trends inform our high-level decision-making in investments, business, family planning and relationships. They are critical factors to our human development, and I care deeply about your health in these matters. I want to challenge myself to describe these trends in a digestible manner, which isn’t always possible at a braai/barbeque, networking event, sports game or family dinner. For too long, I’ve kept this conversation to work, twitter and a few close friends. It’s time to commit to broader and clearer communication, an honest dialogue. I believe that this will bring the best out of me, and you, providing a framework to improve investment, business and personal decision-making.

“Tell me what I must do, son, I don’t have time to understand!” you say… “Can’t we just jump to the conclusion?” Perhaps, and I will offer conclusions, but I find that the conclusions without reasoning are hollow and difficult to digest. Changing one’s relationship to investments, money and debt is sensible when one appreciates the logical imperative, but immensely disconcerting, verging on ludicrous, without it. Some people think I’m a madman for my investment choices. I know why you see it that way, so I’m going to take the time to walk you through my thought process.

Let me say at the outset, this information could be a little gloomy for those who don’t work with these subjects frequently. Please know that I don’t want to be the prophet of doom, and I don’t profit from gloom. I admit, I am more of a realist than a dreamer. And sometimes I’m a little dry and serious, rather than a flamboyant joker. But I’m also an optimist. I’m very optimistic about my future, your future, your family’s future, and our relationships. But we must dig deep, recognise the challenges and engage them. There are solutions to all our challenges. I’ll offer mine and I’ll listen to yours. Our problems are complex, so the solutions won’t be as simple flicking a switch and “getting rid of Trump” or finding a vaccine for the coronavirus. We won’t have all the answers, but through engagement we’ll be one step closer to a solution, which is infinitely better than hiding under a rock.

I believe that we’re approaching a period of sustained economic, financial and social volatility. We need to understand why and face up to the reality. For years we’ve allowed the natural human default “head-in-the-sand” approach to dominate. Myself included. We’ve delayed and compounded our problems, rather than solved them. Perpetual short-termism has become the norm. History teaches us not to extrapolate these trends indefinitely. A reckoning is approaching, and preparation is required.

I commit to writing a monthly update minimum, perhaps more frequent. I’ll start high-level and conceptual, veering into investments and philosophy as I go. The material is pitched at those with reasonable financial interest, but the lens should offer value to investors and non-investors alike. Blessing or curse, most people, investors even, haven’t stared at long-term macro charts and pondered these relationships for years.

“Macro”, you scoff! “Charts are pseudo-science,” I hear you say! “The trend is your friend!” I hear your criticism, and I welcome it. I encourage you to interrogate my framework, conclusions and confidence at every turn.

“What is macro?” you may ask. Simply, high-level macroeconomic trends. We vaguely care about these trends but generally they’re a lower priority because they trend in one direction. Examples of rising trends are debt, inequality, consumption, equity markets, property prices, whereas economic growth, inflation, interest rates, etc are trending in the opposite direction. One-directional trends cause us to extrapolate them into the future, betting on continuation indefinitely and our focus shifts towards the micro; our business, projects, relationships, career, holiday, etc. The macro trends become boring and fade into the periphery or perhaps we’re just too focused on shifting from one micro crisis to the next to care.  That’s understandable. Our micro interactions tend to be more rewarding and engaging than the macro interactions. We also have greater influence over our micro than macro. You’ve got more chance lobbying your wife, than the government so “focus on your sphere of influence” as an old boss used to say.  

Despite this logical focus on the micro, I compel you to understand the macro picture and ensure your micro strategy aligns with the macro outlook. I am convinced that the extremes developing in our current macro trends imply that we’re approaching a macro regime change, where volatility increases, trends break, and the future starts to look significantly different to the past. I’m not saying that they’re breaking tomorrow or next year, nor that I know exactly when they’ll break, or what the future holds. But an economic, political, social and investment regime change isn’t an outcome to be taken lightly. We cannot forecast the exact future, and we’re very unlikely to be able to influence this trend, so why the hell are we worrying about, Rob? Eish! Good question!

Well, we can position for greater uncertainty in our decision-making, which should mitigate against severely negative outcomes. Even if the regime only changes in 10 years’ time, the path there will be tumultuous, and the ramifications of the eventual turning point cannot be overstated. Regime changes are periods of societal upheaval the likes of which occur every 80 to 100 years. Perhaps more important than positioning physically for uncertainty, we can prepare ourselves mentally. The more I dwell on it; mental health is our biggest challenge. Each day is a challenge to fight off my mental demons and become a better person in service of those around me. The mental health challenge is true in “normal” conditions but is acutely clear during the anxiety, frustration, anger and depression gripping households in 2020. I’m convinced that through a combination of strategic understanding of our conditions, simple but strategic planning and mental well-being, we can generate better outcomes for the people who matter to us most.

I look forward to you joining me on this journey where I will share a few macro insights to improve your investment, business and personal decision-making. I hope to generate a rich dialogue with you, learn from your interpretation of this information and deepen our relationships as we navigate this increasingly dystopian world. No matter my material goals in this world, which certainly exist, I know that my relationships with you and the depth of our conversations are the most meaningful outcomes each day.  On wards and upwards my friends!

First edition on debt here.

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