...A look at the firm's latest thinking.
First up, from CityAM, September 30:
Ruffer co-founder retires after 30 years at investment firm
Jonathan Ruffer, co-founder of the Ruffer investment firm, will step down as chair at the end of the year, after more than three decades at the London-based business.
Henry Maxey, Ruffer’s co-chief investment officer, will become chair from the start of next year, in addition to his other position.
The firm, which manages £19bn of assets, was established by Ruffer’s in 1994 alongside Robert Shirley, the 14th Earl Ferrers, who retired as non-executive in 2021.
It is known for its defensive positions, running an absolute return strategy that aims to generate returns regardless of market performance, it returns an average 8 per cent a year after fees and charges.
However, its flagship Total Return fund faltered in 2023 and 2024....
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And from Jamie Dannhauser at Ruffer:
CHINESE PRESIDENT XI JINPING PUT IT IN 2013, “ADVANCED TECHNOLOGY IS THE SHARP WEAPON OF THE MODERN STATE.”
The 21st century will be defined by the technological race between China and the US. If financial markets are to be believed, the US has a big lead: an AI-enabled disinflationary nirvana lies ahead for America; for China, a balance-sheet recession without end. This future is not the one we expect: a new more volatile and inflationary regime, posing potent threats to capital preservation. Could we be wrong?
WHICH HISTORY AND WHICH FUTURE?
History is a critical lens through which we try to make sense of our infinitely complex world, where past, present and future are interlinked in mysterious but fundamental ways.
What society has recently experienced – the global financial crisis (GFC), ten years of squeezed living standards, pandemic lockdowns and the ensuing inflation surge – shapes how we perceive the world and make the decisions that will drive our economic and financial future. The experiences of previous generations informed their decisions, too. The Great Depression and the Second World War moulded the post-war policy environment. Rapid growth and financial stability under the Marshall Plan and Bretton Woods led to elite complacency during the 1970s. And that decade’s economic malaise and geopolitical turmoil spawned the neoliberal world order.1
That world order – US-led, globalising, respectful of the rule of law, technocratic and
with left and right increasingly aligned on economic policy – has now become our history. To be replaced by a future that is not yet known. We are leaving one regime, which we dubbed the deflation machine, of low and stable inflation.2 And we believe we are entering a new one, far more hostile to the owners of capital. Inflation will be higher on average and there will be greater macroeconomic volatility. Since the absence of inflation risk was a critical driver of cross-asset dynamics in the dying regime, its return will upend the rules the casino plays by.3
THE DEFLATION MACHINE REVISITED
In 2003, Mervyn King, then governor of the Bank of England, called the preceding ten years the nice (non-inflationary consistently expansionary) decade. He was talking about Britain’s experience. But the world economy enjoyed an even nicer period, with per capita real GDP growth accelerating markedly (Figure 1)....
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