The Business Cycle in Abnormal Times (w/Robin Griffiths & Grant Williams)
I recently published the chart of the S&P 500 as it moved in 1987 And overlaid its movement this year. And the lines are so close you can't tell them apart. But we know what happened in 1987 from a little later in September through to late October. So this is my heads up. I would strongly be advising people to take risk off the table.
By all means if you're in love with Tesla or Amazon, these are some of the stocks that are still hot. Own them. But make sure you know where the door is, and your position isn't so large that you're going to get locked in if there's a correction. And on the broader market, take money away. Sitting on cash may not make you rich.
But you'll live to fight another day in the event of a violent correction. Grant Williams: This is all fascinating stuff. And I think your mountain climbing analogy is really interesting to me, because anyone that summits Everest or Kilimanjaro, they stay there just long enough to take the photograph. So there'll be some other asset classes that although not currently as strong as the equity market are strong enough to be attractive. And their valuation may be better. And to some extent their correlation won't be as strong as with all equity markets.
And the one that is a standout-- normally people are, well, commodities. But, in fact, within the commodities space they do not all look great to me. They've all had a four to five year very nasty bear market. But in some cases that does not look as though it's over yet. Hydrocarbon energies still look risky to me. Too much supply.
Too little demand. In fact, shrinking demand. But within this space industrial metals coming off very low depressed bases look jolly good indeed. And there's a reason for it. Even with our cars, they're moving more electric and less petrol driven.
And so you're going to need a lot of copper wiring in there. And copper is the metal, supposedly, with a degree in economics, it's so useful. And the copper mining stocks were very, very bottomed out. So many of the giant mining companies have some copper. But if you can have a stock near a pure play in it, in the FTSE index you'd be talking Antofagasta. That looks extremely attractive to me.
Grant Williams: So when Robin Griffiths first appeared on Real Vision with a presentation late last year, it went down tremendously well. He's been in the markets for 50 years now, which just boggles my mind. And his reliance upon cycles, and his understanding of those, and how they work, and how they fit into the market dynamic is unrivaled. Everybody loved his presentation.
If you haven't seen it yet, I would advise you to go and watch that, maybe before we even sit down for this interview. Because you'll get a really good understanding of how Robin's framework works. He explains it incredibly well during that presentation.
What I want to sit down and talk to him about today is just to get a sense of where he sees the world, using those frameworks, the fact that QE and negative interest rates have perhaps distorted a lot of those frameworks and technical setups that he's relied on for so many years. I want to understand how that's changed the way he thinks, and get a sense of him as to what he thinks comes next. Are markets fairly valued, fully valued, overvalued? And what does he think we should do to perhaps mitigate the risk. So let's sit down with Robin and see what he has to say. OK.
And your first appearance, which was I guess last year now-- time flies-- you did a fantastic presentation that so many people really, really enjoyed. And anyone that hasn't seen you before, I'm going to direct them to that because they'll get a really good sense of your methodology and how you put your cycles and your business theory together. What I'd love to do today is get into how you'd apply that to the world around us, because it feels as fragile as one could picture it, but your most recent report suggests that we may be a little way off from anything nasty happening. Yes. This is the 52nd year in the city of London for me. And early on I decided that I was interested in technical analysis, because although I came into it with a degree in economics and had read Benjamin Graham and knew all about value investing et cetera, I realized that as a stockbroker, I did well when my clients did well.
And my clients did well when the share price that they'd bought went up whilst they owned it. And that was more important. So I became a student of the trends in share price movements. And in those days there were no computer systems doing this. So I was in the early stages of using an ancient little steam computer to do this.
And the new, new thing I brought to it was called regression analysis. Because I was publishing my own private newsletter called The Amateur Chartist using regression analysis, and I got a phone call from the then doyen of British technical analysis called Alec Ellinger, who said we technicians use a ruler, and we connect the highs or the lows of a share price movement. And you're calculating this clever line down ---- JASON ZIEMIANSKI: What we're showing you here on our YouTube channel is just the tip of the iceberg. No matter where you are in your financial journey, whether you're a beginner just looking to break into the market or a financial professional looking to up your game, Real Vision has something for everyone.
We look forward to seeing you there. Ellinger, who said we technicians use a ruler, and we connect the highs or the lows of a share price movement. And you're calculating this clever line down the middle, which we think is good. So come and tell us how you do it. So that was what I did.
I should have put my name on it. You should have. These days they're called Bollinger bands, and Mr. Bollinger came along later. But I did realize fairly early on that it was important to know where to start your regression analysis from, because there were clearly cycles in the fluctuations, the trends that were picking up. And at that point I remembered my degree in economics when Joseph Schumpeter had a model of different lengths economic cycles.
And he put them together in a sort of model showing how they interacted with each other. And I've spent my life saying, if that is right, I'll work that through to how the stock market will respond to those cycles and draw you a roadmap. So for most of my life it's been called a roadmap of the stock markets. And the length of cycles, there's an annual seasonal deviation that everybody knows about. And in words, we all know to sell in May and go away.
You come back for a mid-summer rally. And then if there's going to be a drop, it's usually from late autumn through to late October, sometimes November, that period of time. And that back tests in most world markets pretty well.
It is a northern hemisphere seasonality because in the last 200 years the largest economies have been northern hemisphere. If we are to go back further in history that wouldn't have been the case. But anyway, that's where we are. The next cycle in Schumpeter's model is a four year cycle, often just referred to as the business cycle. The kitchen wave is what it's called in the textbooks.
And again, there's 250 odd year’s worth of data strongly supporting the notion that there is such a cycle. In the period of time when Great Britain was the dominant superpower it fluctuated quite a lot. One cycle might be as short as three years, and the very next one as long as five. So it sort of averaged about four.
But you were never quite sure if the current cycle was four years. However, ever since the USA has become the dominant economy on the planet, their presidential election is mandated at four years, it's been a four year cycle pretty reliably. However, having said that, with current data there is no evidence that such a cycle still exists. Because quantitative easing and zero interest rate policies seem to have been able to squash it completely. It will probably reappear when policies return to what used to be regarded as normal.
We're clearly in an abnormal phase of history at the moment. Nobody's ever seen zero interest rates before. However, theory suggests that squashing the shorter term cycles is quite easy. But squashing the longer term cycles is much more difficult.
So they're more likely to still be there, and that the very next cycle is the decadian rhythm, known in the textbooks as the jugular wave. And what tends to happen is in the first few years of any decade, the stock market doesn't really do very much. It might be up a little bit one year and down a little bit the next.
Round about the fourth and fifth year of the decade it gets going into a definitely strong bull market. And the amount of money you make is often best in the fifth year of the decade. The bull then carries on a bit longer but losing momentum. And if you're going to get a nasty correction, it usually comes not only in the seventh year of the decade, but in the second half of the seventh year of the decade, i.e. round about
now. And then the decade usually ends with a bit of a rally again from quite a low level. The last decade, if you can remember, it worked pretty well. The bear market started in the seventh year.
The worst of it was in the eighth. And ninth year clearly ended the decade with a jolly good rally. If there's going to be a crash it's quite likely to come in this period of time, in the seventh year of the decade. And the one I've got in mind pretty much as a role model is 1987. 1987 was in the early stages of a much longer term secular bull market. I'll come onto the secular trend in a minute.
That had begun in 1982. It was the Thatcher, Reagan years when capitalism was looking pretty good. And it went all the way up to the end of the Millennium basically. So '87 was early on in that secular uptrend.
And yet none the less, you came on into your office one day in late September in 1987 and the whole market was down 25%. How did that happen? That didn't seem to have been an event. No missiles firing anywhere.
And yet, the market could do that to you. And, of course, people with hindsight explained, well, there were program trading and all this. Yeah. Portfolio insurance. But yeah, right.
But it was a crash, definitely a crash. And markets are vulnerable to crash if they're expensive to start with. Something that's cheap is inherently less likely to fall very far because the floor is close underneath it. So the markets where you fear a crash is where the valuation basis is extreme.
And the largest market where that is quite clearly the case now is the USA where the CAPE or the Schiller-- however you look at the numbers. And you can dress them up different ways. And analysts always like to be bullish. So they'll give you forward earnings estimates.
That looks like artists' imagination to me some of the time. But they'll try and get the number down, but however they try it, it is by its own historic yardsticks extraordinarily expensive. It's also vulnerable in another way in that it isn't most of the stocks in the market that are holding the index up. It's incredibly few. And the acronym FAANGT has been working.
FAANG has got two As in it, one for Amazon and the other for Alphabet. And T is Tesla. Those are the stocks that have been holding the index up. The stocks that used to be regarded as the backbone of the market, IBM, Walmart, General Electric, etc, they're quite clearly not in a bull market at all and haven't been for quite some time. So it's vulnerable.
Coming back to the next cycle, the long term one, in Schumpeter's model this is called the Kondratiev wave. And it's a long term cycle. I don't waste energy wondering whether it's a 50 year cycle, or a 60, or some other length of time. You go up and down for really quite long periods of time. And in more or less in my lifetime I've witnessed an entire Kondratiev cycle.
Just after World War II when at that time government bonds or gilt-edged stocks were deemed to be the lowest risk, safest place for your pension plan there was a man called Ross Goobey saying, no, no, no, you should have these risky equities because you'll get wiped out in the bond market. And for the next 25 years, that's exactly what happened. The real value of your gilts went down, and your equities went up and up. And then when the cycle turned the other way, I always call that Bill Gross's bull market, because the bond market was the unbeatable thing to have.
And although equity indices continued to rise, they didn't outperform their own government bull market. And when you have that, the asset allocation that you should have is to own quite a lot of bonds. And believe it or not, even though the S&P and the Dow were going up to new highs, up until really quite recently they were underperforming the US bond market. And therefore, I ended up with what you could call quite a bear market looking distribution. And quite a lot of people said, Robin, the index is going up but you're calling it a bear market. This is clearly double Dutch to us.
I had to explain that if you can't even outperform your own 10-year treasury bond, why are you risking life and soul in the equity market. However, all of that changed in a night when Donald Trump became president of the United States. At that stage equity indices took off like a rocket. For the first week or two it looked like a purely US experience. But eventually what was called the Trump-- hump-- The Trump bump.
Yes. Yeah. That faded and the different sets of stocks started to perform again. And also other markets around the world followed the same thing. Now, what I've been doing in my work for many years is taking the stocks in an index, in Britain, FTSE, or in America, the S&P 500, looking at the trends of them, and then saying, I can divide them into up, down, and sideways.
The next sophistication was to say to them, well, of those uptrends, some are much stronger than the others. And what I noticed about the up but not strongly up trends was it was quite a high probability just after you'd backed them that they would turn around and go the other way again. And this was not good. So you needed the strength of the trend to be good enough that the momentum was overridingly strong and you wouldn't have that happen to you. So instead of dividing stocks into three, I divided them into five.
And you wanted your longs to come from the top quintile and your shorts from the bottom quintile. I back tested that from market neutral. And I've been doing this on 40 different world markets for a long period of time. And the algorithms that let me do this are pretty well refined, and they work in all markets. They work better in some markets than in others.
And the trick is, you want the trend to be strong and the, what you might call the, random volatility to be relatively little. And at the moment we have exceptionally extreme conditions like that. So you own those strongest trends. And you, in theory as a technical analyst, you do not predict when the trend will end. You own it until it does end, and then you cut out your position.
And at this moment in time, when I now do this what I used to do with stocks to world asset classes, in the top quintile all of the strong market trends are equity markets, global equity markets. However, there is a sophistication in here in that the passive holding of the global index is one of the asset classes. And if you can't beat that, you shouldn't be in the market that's underperforming that, because that's almost the lowest risk equity asset you can own.
And it's right in the top quintile. The markets that do beat it are all Asian. They are definitely India, China, and the emerging markets, particularly the Asian emerging markets.
Also strong but not as strong as the world index are the big markets of the West, which is USA, Britain, and actually Japan is in with that one, those giant markets. And then when you bring in a look at the valuation basis behind this, you find that by their own historic standards it's the USA where the valuation basis has been stretched extraordinarily. Now, valuation is not a timing signal, but in the end when you're near the top of the mountain you can go a little higher, but not a lot higher. And then the downside is quite big.
So in terms of risk-reward analysis, why would you want to buy a market when it's about as expensive as it has ever been in history just because it hasn't topped out just yet? Especially when you're coming into a period of time when history says there's quite a high probability that it tops out very soon. I recently published the chart of the S&P 500 as it moved in 1987 And overlaid its movement this year. And the lines are so close you can't tell them apart. But we know what happened in 1987 from a little later in September through to late October. So this is my heads up.
I would strongly be advising people to take risk off the table. By all means if you're in love with Tesla or Amazon, these are some of the stocks that are still hot. Own them.
But make sure you know where the door is, and your position isn't so large that you're going to get locked in if there's a correction. And on the broader market, take money away. Sitting on cash may not make you rich.
But you'll live to fight another day in the event of a violent correction. This is all fascinating stuff. And I think your mountain climbing analogy is really interesting to me, because anyone that summits Everest or Kilimanjaro, they stay there just long enough to take the photograph.
That's it. And then off they go. Yeah. No. They don't all get off the mountain alive.
Exactly right. That's a great point. So when you talk about Tesla and Amazon, these are, to me, extraordinarily stretched stocks. Yes. Everyone is in them.
But I think everyone's sitting there thinking, OK, I know where the door is. I'll be fine. Yes. And the problem is, if everybody moves to the door, by definition you can't all be the first person out the door. And in fact, you're far more likely to be one of the last people out the door than the first. How do you advise your clients to mitigate that particular possibility? We've got several strategies.
One is to diversify your asset classes. So there'll be some other asset classes that although not currently as strong as the equity market are strong enough to be attractive. And their valuation may be better. And to some extent their correlation won't be as strong as with all equity markets. And the one that is a standout-- normally people are, well, commodities. But, in fact, within the commodities space they do not all look great to me.
They've all had a four to five year very nasty bear market. But in some cases that does not look as though it's over yet. Hydrocarbon energies still look risky to me. Too much supply.
Too little demand. In fact, shrinking demand. But within this space industrial metals coming off very low depressed bases look jolly good indeed. And there's a reason for it.
Even with our cars, they're moving more electric and less petrol driven. And so you're going to need a lot of copper wiring in there. And copper is the metal, supposedly, with a degree in economics, it's so useful. And the copper mining stocks were very, very bottomed out.
So many of the giant mining companies have some copper. But if you can have a stock near a pure play in it, in the FTSE index you'd be talking Antofagasta. That looks extremely attractive to me. And then when you say, well, the biggest infrastructure project on the planet is China's new Silk Road.
This is going to use a lot of these metals going forward now for a long time to come. So they're on a wicket again basically. So that part of the commodities space looks extremely good. Elsewhere, the precious metals, particularly gold, it only comes about halfway up my list of assets.
So it's not super-duper at the moment. But it's quite interesting. The chart doesn't look terrible. In fact, if it were to go above 1,300 it will start to look a lot sexier than it's been looking for a while now. And it's money.
In the cultures which are becoming more important in Asia, the dollar is not money. Gold has been money for thousands of years. And the Indians round about Diwali buy themselves more gold.
China now mines more gold than Africa's ever done. So I think a little bit at least, maybe 3% to 4%. That's not a risky strategy in a private client portfolio. I wouldn't mind even making it nearer 10% in today's market. And, again, you don't need to go and try and find some new little mine that you don't know much about. You could just buy an asset that performs with the bullion price.
That would do the job of diversifying risk. Now, you touched on the dollar there. What does all this mean for the dollar? Because strong commodity markets generally mean weak dollar. Yes. And we have seen this massive divergence of opinion over the last couple of years, either very strong or it's over. And the bears kind of have the upper hand at the moment.
Yes. What do you see in the immediate future for the dollar? Well, a year ago the most overcrowded trade was you got to own the dollar. And the people have realized, we didn't make any money on that one. Actually we lost a little bit. Not a lot.
But we lost a little bit. So as you say, recently it's been drifting off down. It's been breaking some support levels on the chart, but not disastrously broken. So the question is, if we suddenly had a panic, a real panic, would still people go straight back into the dollar? And quite a lot of people probably would.
So I don't think you sort of dump the dollar. But the notion that it's going to be the US economy saving the planet, I don't agree with that at all. The economies growing much faster are all in Asia.
In fact, the American economy is growing at, say, 1.9%, which is OK. Not great, but OK. It's certainly not a recession, but it's subpar growth. So that is unlikely to make the dollar super strong. So really why you would be in the dollar is for liquidity reasons. It's the big market.
You can deal in it. But you can also deal in yen and dear old sterling and the euro. And some of those because they're cheaper are becoming attractive.
In any event, just diversifying your risk a little more widely is a good idea. The final bit that goes with that is to rebalance your portfolio. In my work, whether we're doing lists of stocks or lists of assets, if we regularly rebalance the market, the holdings, that keeps you in the game longer. It doesn't put you in the top performance list, but you live to fight other days far longer than the guy that swings for the fences. But this world we've created of passive investing, to all intents and purposes, doesn't really allow you to rebalance in the way that you suggest. You can adjust your ETF mix.
Or you can adjust the index you follow. But it really takes that ability away from most people. Yes. And we get this herding effect where everybody gets pushed into the same stocks, the same places.
Yes. Which if we get an '87 event-- Extremely dangerous. Extremely dangerous. Yes.
The active managers are usually quite good at exploiting the smaller fluctuations in price around longer term trends. And when volatility is high, and that would be measured by the VIX index being high, they make out like bandits. But at the moment the volatility index is about as low as it's ever been, certainly in my lifetime. And furthermore, when you look at bets that have been placed on the VIX index, people are betting for it to go lower still. And in my mind, that is dangerous complacency.
You're expecting the world to be even calmer, which means we can't beat it with active management. I see this swing to only passive investment as a pendulum swing. It will go about as far that way as it's possible to go. And having now herded the entire market into just a few stocks, when there's a crash you now wipe them out. You'll shoo them away from this strategy for the rest of their lives.
And the active managers will have a new crack of the whip again. Well, you touched on US growth there a short time ago, being 1.8% let's say. And you could be right.
That may be decent in the new normal. Yes The UK, 1.7%. These Western economies may have to get used to sub 2% growth. And I think you're right.
Maybe that's OK going forward. But if that's true, then equity markets are so grossly overvalued based on what companies can expect their profits to be going forward. Again, there's another reason for a possibly dangerous correction. Yes. Do you see that as a threat? No.
I absolutely agree. I think that's a clear view. When you look at history to say what happened to us last time if we bought a market on this valuation basis, in the 1, 3, 5, and 10 year periods how much money did we make, history reveals if you bet on the market on this basis you make nothing. With a very high risk you lose your shirt somewhere along the way. But it's that you're on a hiding to nothing.
It's not worth doing. Just cause it hasn't peaked quite yet, you don't need to call that top. It's too dangerous a game to do it.
But all the indicators are we're quite near a summit. And you want to get yourself off the mountain in one piece basically. Perhaps the big pivot point, a lot of people would say, would be a US recession.
I know your indicators aren't calling for that any time soon. Perhaps 2018 you think maybe the time that we get that. Yes. Do you see any threats to that timeline? Well, now we would be speculating on geopolitical risks.
Clearly with Mr. Kim firing missiles. That's the sort of thing that could go wrong. And there are other sorts of things that could go wrong.
If some kind of explosion went off in a Middle Eastern oil field that would be quite disruptive too. There are these sorts of things. I've been to the DMZ in Korea on several occasions, and it's always tense there. Saber rattling is something that's always been going on. And I do believe that, OK, the rhetoric sounds very frightening. But the reality is lots of people all around the world, and particularly in China who are sitting right on top of this, they don't want there to be a nuclear war.
So you say one thing and you show that you're willing to do things, but you talk your way out of it if you possibly can. That's in everybody's interest. So I think we should be apprehensive but not terrified of this particular thing.
Nonetheless, that would be the kind of event that could trigger a disastrous economic situation. The kind of setback that my models predict do not actually require there to be an event. The way markets work, when everybody is long on borrowed money, and some investors just decide to put something back in the bank, that equals some selling. If at the same time as that some other hedge fund manager says, well, I'll go short then, you've suddenly gone from too much buying to too much selling. And the markets can react very violently indeed. That's the sort of thing I'm looking at.
Now, if that market correction becomes too big, it destabilizes the economic activity. And then you're talking recession. In fact, you might be talking depression. Going back to that Kondratiev wave, the prediction from the Kondratiev wave is the next one should be the equivalent of what last time around was the depression of the 1930s.
And even though JFK-- FDR tried to get out of it with New Deals and everything, it actually took a war to get out of it. And we don't want that. But the long term cycle does indeed predict that the next time down, whenever that happens, would be depressionary rather than recessionary.
Now, all of my numbers, I don't do economic forecasts, but I pick up on the IMF and other forecasts which are out there in the market, they're saying right at the moment the economy looks fine. If it starts to melt down 2018 going into 2019, it would be a bit dodgy. And when you come to our Western markets particularly, it's demographics which is a negative depressionary force.
Because consumption is what drives our economy. And when we were young baby boomers getting married, and having children, and buying houses, that drove the economy. Now in the West, with too many retiring baby boomers getting rid of jalopies, and condos, and all that stuff, and the next generations are too small to drive a boom in the other direction.
When the millennials are old enough, they will indeed drive a boom. But the period of time when their life cycles look really powerful is definitely not until 2020. And it's probably not until 2023 or so because they come out of college with too much debt. They can't get going quickly. And also society has changed. I've got four sons.
My sons don't want four sons. So the norms of society have altered. But we touched on you your preference of Asia over the West. And that dynamic, that burgeoning section of society that's going to come into there and buy a house, it's not at quite the same level. No.
But in places like India, as you rightly point out, that is a tailwind. Absolutely. If I had to pick one single large market and a democracy to back and say, for your pension plan buy this, I do say to my own children, India is that one market. Of course, you would in fact diversify a bit wider than that.
But that would be the one. And ever since Mr. Modi became the driving force there it's looked really good. It's growing now at about 7 and 1/2% per annum.
And it looks as though it could easily get up to 10% and compound at that rate for a long time. Because they don't have to invent anything new. They just need to build roads and railways, and bring in bank accounts and mobile phones to that many people. The multiplier effect is just going to be amazing really. But it's interesting, because here in the West we've developed this trading mentality. We've developed this, I want to be in and out.
I always want to be long the hot thing. And I want to sell at the right time. Buy the next thing. Whereas the Indian story is very much a one decision, just put money in this thing. Own it.
And ignore it. Yes. Just if the market corrects 20%, don't sell it. This is a generational purchase.
Do you think we in the West have lost the ability to make that kind of commitment to an idea? Because it's strangely absent in the part of the world we are at the moment. Yes. There's a tendency in each society to think our way is obviously best. I know that Brits think that.
And probably under Queen Victoria that was good thinking. Many Americans think that now. And ever since Eisenhower it's been pretty good thinking. But the numbers are now revealing that it's peaked. It's still going to grow. It's not going to disappear.
Britain hasn't disappeared. Neither has sterling. But it's not undisputed number one anymore. And the other thing which is, I didn't know this until I looked it all up, for 18 of the last 20 centuries the two biggest economies were always India and China. Under Akbar, the Great Mughal Emperor, India was clearly number one. But for most of that history it was second to China.
And we were a pretty basic little economy. It's only since the industrial revolutions that the northern Western economies have been dominant. And now with modern technology, it goes all around the world.
We don't have the industrial bases that we used to have. We have rust-belts now. If I worry about certain figures that terrify me and point to a depression, it is the debt mountain, which is global. Worse in some countries than others. And the second one are the completely unfunded pension entitlements that people have been granting themselves, in the most dishonest way.
Because the politicians that grant those things know it won't be me around when this goes wrong. Those sets of numbers are truly frightening in most countries actually. So they've got to be addressed at some point we fear a really painful big reset. We just can't call the timing exactly. We know that when the hurricane season comes in in the Mediterranean. In the Caribbean rather.
You can't predict now when the next big one will be, but you know there's going to be one and roughly when in the year it will come. Well, that's interesting. We're just about out of time. But just to expand on that, this idea of volatility being low, the volatility in the Caribbean with regard to storms is very low until about September.
And then it becomes extremely high. And you may not get a hurricane. No. But we all know that that's a time in a cycle when the volatility chances are much higher. Yes. We're not seeing that in markets.
No. We're just not seeing that cyclicality. We're not. We're not.
So my advice to people is, don't try and be a hero. Look as though you're too cautious for now. And then you will be around when the bargains later appear.
And we don't need to know exactly in advance when that is. But you'll know you'll survive it basically. Robin, we have run out of time.
It's been such fun talking. And hopefully we can come back again, you and I, and have a longer discussion about the debt jubilee, because I think that's something that really bears a much deeper discussion. But for now, Robin Griffiths, thank you so much for joining me.
Thank you. Well, as I said, 50 years in this business and still sane, which is remarkable to me. A fascinating conversation. Robin, I touched on it there, his history of sailing, he sailed around the world with Robin Knox Johnson and at one point was part of the crew that held the round the world speed record. Since then that's been halved apparently.
But Robin has such an interesting way of looking at this and so much experience, it's really important, I think, to get the opinions of guys like that that have seen all these cycles before. His work is rooted in the business cycle, Kondratiev waves. And I think that's these days more and more of a unique perspective to look. So I think what Robin had to say about being wary, very wary about where we are in the cycle, and understanding that you need flexibility, you need to at least try and protect yourself. And maybe the next 5% of these markets, the risk of trying to own that rather than just being cautious is just not worth it.
So a fascinating conversation. I look forward to having Robin back again and digging into that idea of the debt jubilee which we just didn't have time to go into. It's a topic in and of itself. But again, I can't thank Robin enough to come and join me.