Gallant Macdonald - Insights January 2023

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END OF AN ERA

A graph showing that the number of bonds with negative yields has shrunk to zero

This chart is one with which we’ve always struggled. Negative yielding debt wasn’t just a short-lived anomaly, it consisted of many years with trillions of dollars of bonds that cost you money to own.

We have discussed this several times in Insights, and are pleased to have one less anomaly of the free money era to complain about. The return of a true risk-free rate opens up options in asset allocation which we have sworn off for years. Long may they live!

The Future Our Grandchildren Deserve | Bill Gates

There are always numerous causes for optimism in Bill Gate’s annual letter. Given we lead such busy lives, it is easy to forget how much progress is being made in the world each and every year. We highly recommend this one.

It starts from the idea that the poorest are suffering the most from climate change, but businesses don’t have a natural incentive to make tools that help them. A seed company can earn profits from, say, a new type of tomato that’s a nicer shade of red and doesn’t bruise easily, but it has no incentive to make better strains of cassava that (a) survive floods and droughts and (b) are cheap enough for the world’s low-income farmers. The foundation’s role is to make sure that the poorest benefit from the same innovative skills that benefit richer countries.

Venture Capital's Reckoning Looms Closer | Daniel Rasmussen

Some readers may encounter a paywall here so we are including the most important piece of information below. Stacking up the performance of venture funds vs. comparable public companies is the most jarring of all asset classes. Many growth/venture funds are reporting slight declines through 2022, while similar public companies are down over 50% according to Refinitiv’s index (not a perfect comparable, but close enough).

The Prince: Searching for Xi Jinping

A multi-part podcast on the rise of Xi Jinping. In our opinion, Xi Jinping is often discussed but poorly understood for an individual that has accrued such sweeping power.

The David Rubenstein Show: Laurene Powell Jobs

A humorous discussion on serious topics in philanthropy. You probably haven’t heard much about Laurene Powell Jobs’ impact, despite her being one of the largest givers in the world.

“A lot of power accrues to the giver and not the organizations on the ground…we wanted to make sure that we are not the story”