Monthly Letter April 2013

In our monthly le ers we normally write about a subject or two that we believe is important to the world. Our aim is for these comments to give a be er under- standing of our investment process, how we think about the world and how we structure the por olio. In this le er we will give our view on what we believe are important subjects for asset pricing in general and the equity markets in par cular.

Europe

We have commented on Europe in several of our previous monthly le ers. What used to be a 1 step forward and 2 steps back process has changed. There is progress and we believe that Europe is on the mend. There is massive inves- tor skep cism to Europe in general. The current shi from austerity to growth will help both the economy and asset pricing. The structural issues are s ll not solved, but the me that ECB is buying the poli cians certainly helps.

Growth

Growth over the past couple of years has been lacklustre. The massive mon- etary and scal s muli have not been able to create a self-sustaining growth cycle in the developed world. The western world has become addicted to both conven onal and unconven onal help. To say that this will change is a subject that is beyond the scope of a monthly le er, but what we can say though is that the economic condi ons are improving and that the wealth e ect from rising asset prices and low interest rates do have the poten al to get it going.

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