I discovered both Tai Chi Chu’an and Qigong roughly fifteen years ago. Both grabbed me from the start and, over time, I’ve become more adept in my practice to the extent I can cover classes for my tutor and teach it myself.
One of the things I find fascinating about these arts is that every day is a school day. Be it physical, mental or emotionally I’ve learnt so much about myself I sometimes stop and find that I’m amazed. So I thought I’d post a few posts spreading the word.
So what are they?
Tai Chi (太極) — ‘The Supreme Ultimate’• Tai (太) — means ‘supreme’, ‘greatest’, or ‘ultimate’. • Chi / Ji (極) — means ‘ridgepole’, ‘extreme’, or ‘ultimate point’.
Therefore, Tai Chi (太極) literally translates to ‘The Supreme Ultimate’. In Taoist philosophy, it represents the state of dynamic balance from which all dualities (Yin and Yang) arise. It is the unity that gives birth to all opposites.
Philosophical Meaning
In Taoist cosmology, Tai Chi symbolises the interplay of Yin and Yang — the complementary forces that shape all existence. The familiar Yin-Yang symbol (☯) expresses this constant movement and balance of opposites.
Tai Chi Chuan (太極拳) — ‘The Supreme Ultimate Fist’
When applied to martial arts, the full name is Tai Chi Chuan (太極拳, Tàijíquán): • Tai Chi (太極) — ‘The Supreme Ultimate’ • Chuan (拳) — ‘Fist’ or ‘Boxing’
Thus, Tai Chi Chuan translates as ‘The Supreme Ultimate Fist’ or ‘Boxing of the Supreme Ultimate’. It reflects the martial art’s essence — the expression of Yin-Yang balance through movement: softness and strength, yielding and attacking, stillness and flow.
Tai Chi is more than a martial art — it is a physical expression of Taoist philosophy. Through its slow, mindful movements, practitioners cultivate harmony, balance, and awareness, embodying the dynamic flow of Yin and Yang in every motion.
Tai Chi practitioners recognise the importance of Qigong so the teaching of both is a standard practice.
Qigong translates as energy work or energy skill. It is an ancient practice rooted in Chinese medicine, combining movement, meditation, and controlled breathing. Qigong was developed 6000 years ago and so is older than Tai Chi.
It has gained recognition as an effective complementary therapy in various health contexts, leveraging its holistic approach to promote physical, mental, and emotional well-being.
Benefits of Qigong
1. Stress Reduction: Qigong practices foster relaxation and reduce anxiety through mindfulness and gentle movement, which can benefit mental health.
2. Enhanced Mental Clarity: The meditative aspects of Qigong improve focus and concentration, potentially assisting those with cognitive-related issues.
3. Physical Health Improvement: Regular practice can bolster flexibility, balance, and strength, making it beneficial for chronic pain and rehabilitation.
4. Boosted Immune Function: Some studies suggest that Qigong may enhance immune response, contributing to overall health maintenance.
5. Regulation of Energy: Qigong practices are believed to balance the body’s energy (or “Qi”), leading to improved vitality and reduced fatigue.
Modern Western medicine recognises Qigong can, and does, have a role to play in the treatment of various maladies. For example:
Chronic Illness: Qigong has been utilised alongside conventional treatments for conditions like cancer, heart disease, and chronic pain, potentially mitigating side effects and enhancing recovery.
Mental Health: Practices of Qigong may include therapies for anxiety, depression, and PTSD by fostering a sense of calm and centredness.
Rehabilitation: Integrating Qigong in rehabilitation programs can aid recovery from strokes and injuries, enhancing motor skills and coordination.
Future posts will explore Taoism and TCM further along with Tai Chi and Qigong.
For now I’ll simply point out that both practices are not based upon myths but on solid theories about the mind and body. Standard western science has investigated both and found the claimed benefits are true, Further work is being conducted to validate or disprove topics within the disciplines.
As we stand on the edge of the New Year I find myself somewhat pessimistic about what the year will bring. Admittedly I really don’t like New Year celebrations at all; the prospect of enforced jollity depresses me so some of my gloom may be due to that and I know there will be plenty of opportunities for everyone to thrive physically, emotionally and financially. But, but, but……
At home our government is the most incompetent, authoritarian and inept that I can remember. More on this later on.
Globally illegal, unskilled migration is causing great damage to social cohesion and costing the host countries a great deal in the process. Islamic terrorism continues to be a clear and present danger as do China and Russia, India is turning to the Russians, the continent of Africa is still a basket case, Japan looks like it might default, the Arab states are kept afloat by oil, the old colonies of Canada, Australia and New Zealand are paralysed by the same ills as Europe, the EU becomes more irrelevant by the day and America has a mercurial leader who at least has the clarity and desire to make America the dominant force in the world.
South America is riven by crime, drugs and the cartels although Argentina and (possibly) Columbia offer some hope. So moving on to what I think will happen.
1 Britain.
If the 2024 budget was bad the 2025 one was a disaster. It’s the standard tax, borrow and spend Labour budget and they simply do not work. Even with added Financial Repression (see a previous blog post if you want to know what FR is). Now the Guardian is complaining about the impact of the budget.
Add in the rises in NIC, increased welfare spending, the inheritance tax wielded on farmers, the new employment conditions and the attack on pubs and landlords leads to my first prediction. The British people are going to get poorer.
Second prediction is the Budget will be ‘revisited’ in a desperate attempt to placate the rage felt by both the hospitality industry and their customers. But plenty of viable businesses will go to the wall.
Following on from that it’s easy to predict higher inflation. Interest rate cuts will force people out of saving and so might trigger a mini-bubble but nothing productive will come of it.
Also easy to predict is the changes to ISAs requiring people to put 40% of their savings into the markets while knowing nothing about investing is a recipe for disaster. Novices have about 15 months to get to grips with it.
Granted that money will drive profits in the markets but the questions are who will get the money and which markets? My bet a lot of it will go into foreign markets or to advisers once the legislation comes into force; expect a scramble for ISAs come April 2026 to shield as much as possible. I hope I’m wrong but I think a lot of people with relatively scant resources are going to get badly burned.
Next prediction is UK economic growth will be pitiful. My view on the UK economy:
Back in 1976, Margaret Thatcher famously said “The trouble with socialism is that eventually you run out of other people’s money.” I’ve come to the conclusion that it’s not just socialism that this true for; it applies to any government that intervenes in our life that is the problem.
Governments can only destroy wealth and redistribute it. It could be the removal of the child benefit cap, the climate change actions or any other issue you care to think of. Wealth is taken from some and distributed to the rest. ‘Printing’ money does not create wealth – it is inherently inflationary. Borrowing money is merely a tax paid in the future.
It is obvious that countries with high government intervention eventually “run out of other people’s money”. And what does our government do?
Commit more money to the welfare state, funding a green revolution whose time has been and past, expand the state and makes a climate inhospitable to businesses large and small. Because they despise entrepreneurs and the ‘rich’ they squeeze the life out of them; that is why money is being shifted away from the UK and we are losing our best younger people.
The government continue to bloat the public sector. The ONS tell us that public sector employment hit 6.18 million in September 2025, with central government at a record 4.05 million. The NHS employs more than 2 million people, while the civil service alone now numbers roughly 554,000, up from about 416,000 in 2016 aka 19% increase,
Public health spending
Professor Miles of the OBR predicts that UK government debt to GDP could hit 270% by the 2070s. I very much doubt I’ll be around then but I think that will never happen; there will be a major crash before then.
For a start there the elephant in the room. Demographics are going to hit us. For a very long time we had a growing population who would eventually go to work and pay tax. So there was a constantly rising tax revenue. This is not true anymore; there are less and less people paying tax and more people requiring public services. Sooner or later the model will break.
In the graphs below the nominal Managed Public Expenditure is rising to around 50% of GDP. The stylised Laffer Curve indicates a tax rate of circa 45% would yield the highest tax income but that is highly dependent upon the participation rate i.e. how many will work rather than claim benefits or are worse or by working. This depends very much upon the country as these factors vary considerably.
For the participation rate line I’ve used optimistic figures but pessimistic and average figures shift the maximum collection to the left – circa 35-38%. The money tree is dead.
The scale of the problem.
Any attempt to balance the books will be met with cries of ‘Austerity’. Worse, as I’ve said many times the problem is deep-rooted because for many decades we’ve paid for the services we’d like by borrowing rather than earning the money so the public are conditioned to be dependent upon the state.
Next prediction: the government will not cut costs in the public sector while their policies will damage economic growth prospects. Inevitably taxes will rise.
Inflation will be allowed to continue. Why? It reduces the cost of the national debt. This simple graph shows how constant inflation degrades purchasing power. That is why we have a target of 2%inflation pa but who cares if we lose over 20% of our purchasing power in a decade?
What cost a pound in 1960 now would cost around £35.
Prediction: as in the 2024 budget there will be tinkering at the edges but nothing meaningful will change.
Breaking news! The day after I drafted this post our government has announced a partial U-Turn on Inheritance Tax for farmers. I’ll count that as a pre-Christmas win.
The only sensible option is to take as much money as possible out of the taxation system. Use every option to shelter your money from HMRC like using ISAs and buy solid assets that will at least keep place with inflation without attracting taxes in the meantime. Buy gold, silver, diamonds, fine wines, rare guitars or whatever you wish and then hold.
Some people whine about others protecting their wealth to which the correct answer is to remind them that HMRC are very happy to accept overpayments so the whinger is more than welcome to donate their wealth to the cause. But we all know they won’t do that.
Starmer wants the UK to be an AI centre. My prediction is that this will turn out to be a failure and missed opportunity.
One thing of interest is that George Osborne (ex-Chancellor) has been made head of OpenAI. If he performs as hoped we should see a solid British AI presence that will generate a lot of inward investment, jobs and profits. I hope he succeeds but I suspect the odds are stacked against him. No prediction whatsoever.
2a. Gold and silver
I admit I misread this last year and was pleasantly surprised as they both went on an absolute tear.
The rise in silver is perhaps the easiest to understand. It’s relatively scarce and it’s needed for all sorts of industrial processes, medicine and AI. Supply and demand. On top of that a lot of silver is a byproduct of gold mining so, as gold prices rocketed it makes it more economical to extract silver and store it.
Turning to gold. Consider this facts; Central banks remain net buyers of gold and have been for fifteen years, gold mining outputs have remained constant for at least five to six years, Russia has survived by holding a quarter of its reserves in gold and Trump wants to return the dollar to the gold standard. He has support and has launched a Bill to do so.
There’s more besides: digital gold, the fight in Italy as to who owns Italian gold, the Fed are aligning its gold holdings, etc.
2b A diversion to the future
Now imagine a world where a major currency is pegged to the gold price. Potentially this means an end to inflation and allows the creation of a stablecoin that allows people to exchange money for goods and services around the world without delay, without FX charges or secondary transactions throughout the banking system and remove individual’s money from the control of their government.
This will changing banking and financial transactions forever. No longer will goverments be able to see what you earn, what your spend money on or if you’ve made capital gains or losses.
That means governments will no longer be able to tax you; once your cash is in stablecoin what you do with it, what profit or losses you make are invisible. You can move your money where you want it to get the best return or take advantage of the cheapest prices. The possibility of governments being forced to ask their people what services they want and how much they want to voluntarily pay for them for a guaranteed service level is a real possibility. Not in 2025 but sooner than most people suspect.
A complete game changer that could destroy the blob, swamp or whatever you want to call it.
2c. Continuing with gold: For 2026 it means gold will most probably continue its rise. If Trump gets his way it’s very likely gold will be anywhere between $25 to $30k an ounce in a few years and there’s plenty of people willing to bet on that.
Prediction: Buy and hold fold and silver. They are both a great hedge that preserves wealth, there’s more upside in holding them than not.
3. America
America is facing a race between inflation and the tariffs along with re-industrialisation of the country. I can’t make my mind up on which way I think it will go.
However, America has a huge economy and plenty of natural resources. I think it would be foolish to not invest in this. As I wrote last year careful stock selection in S&P 500, the NASDAQ and the Dow will reward the investor
Prediction: energy is an unloved sector with business that lay good dividends so I think that might prosper. Sin companies too.
Prediction: the AI boom has declined somewhat this year but 2026 will see more advances. Look for the ‘pick and shovel companies’ that make chips, quantum computing, provide infrastructure, memory, etc for solid returns. They benefit no matter who buys their products.
AI is set to revolutionise the world. We have all seen the use of Chat GDP, Grok and so on but they are just super search engines that collect data and analyse it. Very good at spotting patterns too. There no doubt that they will replace many white collar jobs. A minor example: I had a mole appear that I thought needed to be checked out. Dermatology took some pictures and the next day I got the result.
But the next generation of AI (version 2?) will be American and it will be a step change in the way we process and use information. Everything from planning holidays and getting the best prices to developing new drugs to treat illness or advancing science will be faster, more intuitive and easier to use.
Prediction: invest in a basket of the American AI companies and hold. There will be volatility but the trend will be up.
4. The EU
An institution constrained by weak leadership, inbuilt instability and factional interests with a currency kept alive by political will that constrained growth . It’s inherently flawed with an expensive bureaucracy and legislation that reduces flexibility. Proven weakness in confronting both Trump and Russia.
Predictions: growth will be insipid at best. Nationalism will become more popular and lead to more instability. Immigration will continue to be a sore point and disrupt unity further, The political paralysis in France and the poor performance of German Industry will put severe financial pressure on the institution.
The EU says it wants to be an AI powerhouse too but it won’t happen. There’s too much regulation to make American investment a major event. Prediction: a failed opportunity.
For now I’d invest in European defence stocks and insurance companies. Possibly a few Spanish companies might do well. The rest I’d avoid like the plague for at least six months.
5, Rest of the world
With the exception of India and a few South American states I don’t see much economic joy. Possibly some opportunities from the South American oil and gas companies? China is facing great problems as is Japan, Africa and the Arab world are moribund, most of Asia is focused on producing cheap goods or faced with Chinese expansionism.
Canada has some opportunities, I don’t see much in Australia or New Zealand. For now I would stay away.
5, Geopolitics
Israel will keep Gaza under strict control. Russia will continue to be bellicose and surely will get what it wants in Ukraine before looking west. China will continue to act as it does; undermining western economies by trade, sabotage and espionage. Not predictions but it’s pretty obvious what’s happening now will continue.
Islam will continue to be a danger to the West, try expand its activities in Africa and continue to subvert the western democracies from within. As I write Trump is taking the fight to Daesh and the narcoterrorists. Good luck to him; it’s just a pity the West isn’t following suit to erase them from the gene pool.
The green technology bubble is blown. Apart from Britain everyone is discarding it. It’s proving impossible to connect ad-hoc power to the grid as events showed when the Iberian Peninsula lost power. In Britain we have experienced similar problems albeit to a much lesser degree- it’s a warning that has been heeded c/f the social media ads about coping with power cuts and the release of Whitty’s advice about making potable water and doing without electricity.
Even without this known problem we came near to power outages last winter and only the Norwegians saved us – not an option this year. And we’ve scrapped more power stations so it will be interesting if we get a bad winter.
EVs are deeply unpopular and pressure from the European and American makers will cause ICE cars to be made for much longer than 2030. Even our green energy policy will have to heed this as we have no real car making capability of our own. Yes, there are plants here but they are owned by non-British interests so the target for EVs is a dream.
6. Where to invest?
First, please do not regard that follows as investment advice; these are purely my thoughts so do your own research. Secondly, never invest more than you can afford to lose because investments can go down as well as up.
With that out of the way it’s pretty much guaranteed that inflation will continue and many asset prices will rise purely as a result of that. The USA is the power house of the global economy so it would be unwise to ignore it. The FTSE100 consists of mainly global companies so it’s a good bet to include it. Gold and Silver are unlikely to lose money medium to long-term regardless of the success or failure of Trump’s desire to get the dollar on the gold standard.
AI and robotics may be volatile but the trend is clear. Defence is pretty much baked in to the spending plans of many governments. All predictions with many individual companies to chose from.
So for 2026 I’m starting off by focussing on ETFs in those sectors. At the moment I don’t see any real standout individual business with a good track record, pay a dividend and have a low beta, so ETFs it is for now.
ETFs hold baskets of companies in a given sector which is good because you don’t have to stock-pick as you’ll follow the market trend. Likewise the downside is you’ll see a performance that reflects the market so you’re unlikely to find that stellar stock that will make you a huge gain. You may lose money short-term but if you take the long-term view you’ll most likely do very well. But there are no guarantees.
Given that I’ll be buying into ETFs that track the FTSE 100, the Dow, the NASDAQ and the S&P 500, Gold, Silver, European Defence, AI and Robotics. For a bit of spice I’ll buy into traditional energy (oil, gas, electricity) and copper prices which I think might be due for a resurgence. All of those will be added to my current portfolio and next financial year’s ISA too. I’ll probably commit 10% to each of them apart from the last two which will be 5% each.
If I spot anything during the year that interests me I might buy into it but I expect my core holdings to be as above.
I’ll also be thinking of investing into assets outside the taxation system as mentioned earlier. The sooner the better tbh as I think it’s very likely they will continue to gain value.
One question I’d ask if I was reading this is does this guy know what he’s talking about out? The only answer I can give is the result of the portfolio I made in April 2025 to put my money where my mouth was.
Personally I’m quite happy with that so far. It beats inflation and it’s tax-free. I’ve no idea where it will end up by the end of March 2026 but I strongly believe it will improve by a few percent.
What did I get correct, wrong or somewhere in between? NB: I’ve taken direct quotes from last year’s post but lost heart at the thought of putting quote marks around them.
1. America:
Last year I discussed the unacknowledged effectiveness of Trump in his first term, I was concerned about the USA national debt, high stock valuations and the battle for the Fed. Also the effectiveness of DOGE and the increased NATO commitment by the EU.
What happened was the EU is now committed to spending more on NATO defence, DOGE never really made much difference and the battle for the Fed has been won by Trump. So 2 out of three predictions correct.
Turning to specifics I was watching Lockheed Martin carefully for signs of a revival. Wrong -2.5% on the year. Also, Berkshire Hathaway might do well. The actuality was low and steady as Buffet resigned – didn’t see the resignation coming but around 5.5% up in the year! Correct.
I believed that USA small-caps and defence companies will do well in the coming year. Prediction correct.
2. The EU.
Undeniably in deep trouble; still are. Correct.
I thought the Germans are likely to go centre-right after their elections in February so I would not be surprised to see them exit the EHRC. Whether they do or not it’s clear they will start demigration. Reality: No exit but demigration and a trend to amend the EHRC. Partially correct
German industry is stagnant at best and I can see them offering a trade deal with Britain outside of whatever the EU diktats are. Wrong
Expect Germany to reverse its energy policies as quickly as possible in 2025. Correct – Happened and happening.
France is stuck in political limbo. Macron can cling to the presidency but he’s stymied. The French systems of governance will allow the country to continue as is for now but nothing will be done to address their economic woes, social unrest and illegal immigration. Correct.
Meanwhile Hungary continues to be a thorn in the side as it will not yield to the EU’s demands on accepting illegal migration. Poland is similar as are the Spanish and Italians. Expect a more robust policy aping the Germans demigration. Correct.
The economies of most EU states are weak, their industries suffer from low productivity and they are bound by both a single currency and a central bank rate so they can’t change despite the mismatch between sovereign countries. Correct.
Nevertheless it is clear that Germany depends heavily on non-EU trade, and especially with the UK and the USA, Thus will provoke political discord both in Germany and the EU. Correct, especially with the motor industry.
Expect a more EU-sceptic and centre-right political view to emerge in 2025. Correct. Happened and is happening.
3. Great Britain.
I wrote that Starmer is in a bind, can’t sack the chancellor because if he does then he will fall too. His only hope is that the large majority he holds stays the course and things get better. But there is discontent amongst his MPs that reflects the public discontent. Expect divisions in the Labour Party. Correct.
My prediction is that the Reeves’ budget will be revised in the next three months or so. It was correct – see next twoparagraphs.
Forecasts changed — OBR productivity and growth forecasts were lowered, reducing fiscal headroom. Policy proposals were revisited — especially more politically sensitive ones like income tax rate increases. Some policy designs were softened or dropped due to economic or political pushback. Correct
I wrote last year the people of Britain will endure higher inflation, job losses, lower taxation revenue, lower interest rates and more borrowing regardless of whatever tinkering is done. The British will become poorer. Correct
I didn’t see the possibility of Mandelson being recalled. Missed.
I believe it is possible that Trump will offer a tariff-free deal to Britain.Wrong.
I mentioned Argentina as a polar opposite to the British economy. My prediction for Britain is decline and Argentina will improve further in 2025. Correct.
However it’s clear the Starmer way is yet more state interference rather than actually doing something. Correct, happened and is happening
4. Nigel Farage and the Reform party.
As I write the Reform Party is really gaining strength and is, arguably, now the largest opposition party. Correct.
The council elections in May 2025 will be a test of transforming numbers into voting reality. My prediction is that Reform will make significant gains over the rest of our parties and will gain control of a number of councils. Correct.
5.Geopolitics.
The war in Ukraine will end in 2025 with Russia keeping its gains. Nearly happened but that’s what it looks like now. A near miss?
Isreal will not cede control of Gaza and will continue operations against Hamas, Hezbollah, Houthi’s and Iran. Correct
In the Middle East I expect the normal things; As predicted so correct.
The continent of Africa is a mess. Chinese influence will grow. As predicted so correct .
India will continue its own Industrial Revolution in 2025. As predicted so correct.
Russia and China will continue their present courses of being global threats and undermining the Western powers. As predicted so correct.
Both Russia and China will continue to further their efforts to control the world’s energy supplies. Russia by oil and gas, China by controlling the countries who have the minerals and ores needed for energy, especially green technology. As predicted so correct
I wrote that Russia’s economy is now under real stress, their military have been depleted by the invasion of Ukraine and, likewise, their armaments. The fall of Syria and the diminution of Iran will cause Russia real problems as their supply lines have been compromised. As predicted so correct.
Islamic terrorism will continue to be a clear and present danger either by the usual terrorist attacks or by undermining the West from within. As predictedso correct..
6. Mega trends.
The development of green energy as is currently envisaged will be abandoned (or severely curtailed) globally with the possible exception of Britain. Correct – happened and happening.
It is almost inevitable that the global focus will shift to nuclear power. AI companies are already investing in it to meet their massive power requirements. Correct – Happened and happening,
Expect a focus on nuclear and especially SMR technology. Correct.
The next mega-trend is AI. Happened stock market valuations became too high so there’s been a correction but the trend is clear. Correct.
The third mega-trend will be quantum computing. Correct, below are some hints on progress this year.
Technical Progress: Bigger qubit systems Better error corrections New architectures emerging
Market & Investment: Funding up sharply Quantum stocks highly volatile but trending upward
Early Practical Uses: Algorithms solving niche problems Cloud access growing
Global Strategy: National initiatives Education and ecosystems expanding
Commercial Reality: Still early phase with practical broad-scale advantages not yet mainstream
7. Society
The prediction was as the political views in the West change to a clearer focus on defence, self-sufficiency in energy/food and economic prudence so will social attitudes inevitably change. There will be much greater scepticism about the long-established political parties, their policies and performance. Correct.
There is general dissatisfaction across the European continent about the current state of just about everything state-controlled. I believe this trend will increase.Correct.
The days of wokery are numbered and I believe the ideology will be seen as the idiocy it is starting in 2025. Correct, happened and happening.
The same change will happen in the corporate world. Currently hectored by activists into the environmental, sustainability and governance ideology will die. Correct and happened apart from the Civil Service.
8. The Markets.
Most western countries are entering the decline phase so I predict a rotation into more defensive stocks and smaller companies will do well. Correct.
The ‘sin’ stocks will probably be a safer haven and usually offer a good dividend; tobacco, booze, oil, utilities and defence. BAT for tobacco, Diageo have done poorly but might be worth watching, Shell/BP and BAE. Correct apart from Diageo.
I suspect the Mag7 will not see the same growth as previously; their valuations might become more sensible due to market corrections but I doubt they will crash and burn. Markets always return to the mean sooner or later. Correct,
Here’s the current state of play. Average growth in 2025 noticeably lower than in 2024 (roughly half or less), reflecting broader market rotation, corrections, and profit-taking after very strong prior gains. 2025’s returns remain positive overall for the group on average — but much less concentrated than the exceptional gains seen in 2024.
Next prediction was The UK stock market will continue to trade pretty much sideways over the year although I expect a bad first and second quarter. What happened was the FTSE 100 First quarter was volatile ranging between 7.7% up to -5% down by April. Then followed a steady rise to circa 20% up on the year. I got some of it right but overall wrong.
I predicted that the US market will outperform and the European markets will have an aggregate small decline over the year. The reality was the US and Euro markets mirrored the FTSE albeit with deeper lows and smaller highs. Incorrect.
Next prediction: As far as I’m concerned the place to put your hard earned cash is in reputable American small caps that have a good track record of stable growth and rising dividend payments. Correct as dividends plus FX changes added to price rises.
If you want to stay with large caps then it’s the Dow Jones for me. For the first quarter of 2025 (and probably beyond). Mainly correct as I rotated out of the Dow in late Feb/early March and back in by end of May. – aided by FX changes.
A good contrarian play might be the ‘Dogs of Dow’. Correct: 14.9% up + average yield of 3.3%.
I’d expect the commodities markets to trade within range for Copper, Lithium, Palladian and similar industrial metals. Correct.
Probably a modest rise in Uranium as people position themselves for a nuclear future. Correct with circa +2% rise.
Gold and Silver have had a good run for the last year or so and I believe that they are a bit toppy. I don’t expect major changes unless there is some major disaster or war in 2025. Wrong: both have had a stellar year.
Oil is still vital but, again, I expect normal trading patterns. Correct.
On crypto I thought: Bitcoin, and other crypto, is becoming mainstream now. Correct
I’d expect continuing volatility but with an upward trend – possibly a spike in mid-January or soon after. 94% of all Bitcoin has been already mined so I’d anticipate an upward trend on crypto. Mainly correct for the year, currently down but it’s volatility at work.
I wondered about MicroStrategy (MSTR on the NADAQ)…… so now could be the time to buy? Or it could be catching a falling knife. Turned out it was a falling knife being down 55% YTD. I can’t count that as right or wrong – I’m just glad I avoided the knife.
Food commodities could be an interesting area……I would expect the prices to reflect this by an upward trend which will be passed on to consumer prices. Another inflation driver! .Correct
A shipping company that has caught my eye is TORM. My suspicion is that it’s been aggressively shorted but, regardless, the decline seems to have stalled recently. Correct but no recovery yet.
Summary
There was a total of 56 guesses about 2025. 8 were wrong, 3 were unexpected/missed and 45 were correct. Which is pretty good overall.
I’m not worried about the unexpected sacking of Mandelson or the retirement of Warren Buffet; things happen and we adapt.
But I am more concerned about underestimating the Trump effect. Even though I knew what was about to happen my thoughts on the magnitude of it were more benign than the actuality.
The Liberation Day/Tariffs affair played a great deal more havoc in all the markets than I anticipated. Stocks tumbled, bond yields went up in April then, as things stabilised stocks went racing ahead, trade inventories rocketed then fell back. Euphoria maybe? Meanwhile Gold and Silver went on a tear as investors flocked to safety.
To start with two quotes by very different economists.
By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. – John Maynard Keynes
Inflation is taxation without legislation –Milton Friedman
How would you react to the information that you are going to become poorer and this will continue for at least fifteen years? How would you react if you knew it was a deliberate policy by your government and the central bank of your country? Or that policy is called Financial Repression?
The idea of Financial Repression (FR) is not new. Britain used it to pay for the Napoleonic War and the Second World War while America, Italy and Greece (amongst many others) have also used it to bring down their debts. Currently both the UK and the USA are following the same path.
It’s a turgid paper to read so a brief translation follows in the following paragraphs.
The essence of FR is that:
It requires an economically captive population; especially those who have savings and assets, usually older people, homeowners, pension fund holders and others who have difficulty in turning assets into money and moving it offshore.
‘Unexpected’ inflation is prevalent for 17 to 18 years. Both the UK and the USA started after the Covid pandemic when national debts became astronomical in relation to GDP hence the ‘15 years to go’ in my title. Inflation reduces the buying power of money; after five years of inflation at 5% a Pound is worth around 73p, after ten years that Pound is worth less than 50p.
Bond yields must be kept below inflation. Bonds are simply debts; if the coupon paid is less than inflation the indebted nation is borrowing with cheap money.
Taxation and schemes to get the public to invest in government, or central bank, schemes can be used to remove money from investors, savers and the general population.
It must be kept secret and deniable from the population. If they realise what is happening an economic catastrophe is pretty much certain.
The first point is obvious. If your money is locked into assets that are hard to sell, can be tracked and taxed you’re a captive. That’s why it’s difficult to invest in South Korean or Brazilian businesses, get crypto currency, etc. Try getting an offshore bank account or withdrawing a large amount of your own cash from a domestic bank you hold an account with.
The second point is that inflation is being caused deliberately by central banks because inflation erodes value. If you lend a sum of money to someone else for a period of several years and only get the capital back then you lose buying power.
This means the borrower gains; the lender gets the same number of notes back but the value is less. Effectively debts lose their value over time in an inflationary environment.
But it is important that inflation remains ‘unexpected’. Otherwise the people will catch on. Variability in inflation covers this tactic and most people are blissfully unaware of what is happening. The blame can be put on Brexit, the Ukraine War, energy costs, food costs or whatever comes to hand that sounds plausible.
The third point is a necessity for the plan to work. If Bond yields match, or exceed, inflation then the debt does not reduce.
Turning to taxation and government schemes. Simply by not increasing tax band levels in line with inflation taxpayers have more money taken from them. This is called Fiscal Drift. It is helpful because it allows the government of the day to claim they aren’t increasing tax and brings in more money to the exchequer.
In Britain we have a National Savings Bank and Premium Bonds. The NSB offers pitiful returns to savers. Premium Bonds allow investors to have a chance to win cash prizes. In both cases the purchasing power of money in these schemes reduces due to inflation and the government has got the money to use. Another cheap loan that reduces as inflation rises.
Point 5 is necessary because when people realise the value of their money is reducing rapidly they spend it immediately. This causes inflation as we saw in the 1970s. Given we already have ‘unexpected’ inflation built in to FR any further inflation can cause an unstoppable inflationary spiral. Plus the possibility of civil unrest when the population realise they are being scammed.
There is also the very real danger that the bond investors realise what’s happening and refuse to buy bonds. Thus cutting off public expenditure immediately. Unless yields rise to beat inflation which scuppers FR.
Between themselves governments and central banks have worked together to create an opaque, unaccountable system that is designed to extract money from the people.
In Britain the BoE has specific responsibility for inflation and financial stability. The Governor and Board are appointed and not accountable to the public. The government can legitimately claim the BoE is independent of governmental control.
The BoE has chosen stability over inflation. FR is happening now and will continue to happen until the national debt is reduced to an acceptable level. That level is decided by the BoE.
Oxford Economics have calculated that reduction is around to a liquidation tax of about £135 billion now. But inflation cannot be too high so using a window of around 14 to 15 years of inflation gives an estimate of around £1 trillion. That’s the amount of money that will taken from savers, investors, pension fund holders and anyone who pays tax in Britain.
So, governments and central banks collude in this process to reduce national debts. But these debts have arisen because the electorate have believed previous government’s promises of ‘more free stuff’.
Everyone in every country wants good state pensions, welfare payments, free services like education, health and social care, free crèches for children, free school meals, low retirement ages and so on. However, the reality is the electorates aren’t productive enough to pay for these things so the government has to borrow to make good on its promises.
FR is here and here to stay for at least fifteen years. Everyone in Britain will become poorer. Both are undeniable; it’s happened, is happening and will continue to happen.
How to mitigate the losses and, hopefully, profit are the subject of another blog post.
I’ve been reading the reports about the Labour Party conference.
It seems as though Kier Starmer is well up against it. His party is falling apart and is ill-disciplined as the various factions jostle for position. The party has lost six Cabinet ministers, an ambassador and several special advisers due to dubious conduct. He also seems to have an obsession about Nigel Farage and the Reform Party.
On top of all this, the Labour Party has been shown to be inept in government. They planned how to win an election but had no plans how to govern.
As a result bond yields are rising, inflation is increasing, unemployment is rising, capital flight from the City of London is increasing, the public services have shown no improvement whatsoever, and, despite all the promises, the small boats problem has yet to be tackled.
The cherry on the cake is the national ID scheme which nobody wants and was not in the manifesto.
All things considered this is the pattern of every Labour government during my lifetime. This is no surprise because the left and the far left have always argued and fought once they’ve gained power. The rule is characterised by division and envy while dissent is met with incoherent rage as the factions fight. The end result is abject failure and a weaker country.
In years past I got to know a number of people who were very active in Militant. A very angry, fractious bunch of people who seemed to be unable to agree on anything whatsoever once you’d got past the slogans. The same as we saw in Momentum during the Corbyn area. The recent Your Party debacle shows it’s still the same.
I was reminded of this pattern of behaviour the other night. I visited a pub and while I was there I met an acquaintance who was sitting with two friends – both of which are very much to the Left but normally very sociable.
The acquaintance is not a person that I am particularly fond due to previous encounters. These were nothing to do with politics. I find him arrogant, bellicose when drunk and rude. The years haven’t mellowed him but seem to have impacted his personal hygiene. He also is very Left wing. However, I greeted both him and the other two pleasantly.
One of his friends asked me “What did I think about Donald Trump‘s policies tariffs?” I replied his strategy is pretty clear and straightforward. The friend asked me whether I thought it would be successful or not. I replied I didn’t know nor much care.
I then asked if I supported MAGA. No, I replied as I’m not American but if anything I’d be MEGA because Make Britain Great Again is an unpronounceable acronym. In return I asked why he thought I’d like MAGA; the answer was because I was wearing a red hat. I said I like the colour red.
The conversation then went onto topics like modern monetary theory and Fiat money. Why I don’t know – I’d only stopped to say hello on my way back to my table.
Anyhow, my response was people on the political left believe a Fiat currency can never default because it can always issue more money. In that they are correct.
However, issuing money is not without consequences. I pointed this out by mentioning a few fatal flaws in MMT (as evidenced during the pandemic) and the effects of releasing excessive amounts of new money into an economy without justification.
My acquaintance then jumped in with a diatribe. Apparently, a reasoned argument against these theories makes me a Trump-loving person, a Tommy Robinson fanboy, a bigot, a racist, and for good measure a fascist. None of which are true. But I do like a red hat!
What amused me were two things. Firstly, his unbelievable, anger and rage. The second was that his two friends also jumped in on the pile-on despite our conversation being perfectly civil.
If that sort of behaviour is the norm in public during a polite conversation, I dread to think how affairs in the Labour Party are conducted. These people of the left are almost invariably fanatics; the default mode is one of self, righteous, indignation, anger and rage.
The arguments that they propose are usually weak and counterarguments are dealt with by specious ‘what about’, changing the subject and downright hostility. Talking to them is like nailing a jellyfish to a wall – futile, painful and doomed to fail.
Yet again, my experience has confirmed that the left, and especially the far left, are toxic people. They profess love, tolerance, diversity and inclusion. The reality is they hate, have pitiful understanding of what they talk about and cannot bear for their positions to be countered by reasoned argument. Invariably the first defence is to mention what someone wrote decades ago and, almost invariably, that person is now a footnote in history at best.
Don’t believe me? Try asking one of those on the Left what the Bond Market does, why it is needed and how does it work? Or justifying the belief that ‘printing’ money automatically creates real economic growth. Hint: increasing GDP is not the same as economic growth – what matters is productive GDP.
They are angry, ill-informed and bitter. Purely anecdotal but my experience is that their success:fail ratio is pretty low.
My approach to investing is usually conservative and attempts to balance capital growth with dividend income.
Typically my portfolio Sharpe Ratio (risk:reward) is around 2 and my beta (volatility) is around 0.9 which, in plain language, means I’m quite well rewarded and not as susceptible to market changes. My annual post-tax returns are usually circa 10-12% although I’ve had better and worse years.
My usual strategy is to be a contrarian cyclic investor based on value. The angst of day or short-term trading is not something I enjoy.
However, I have made a punt on the future and emerging technologies. One is relatively obvious but the other is rather out on a limb.
My reasoning starts with declining European birth rates.
These have been declining for several decades, and this trend is projected to continue. As of 2025, the total fertility rate in Europe is estimated to be 1.41 births per woman, significantly below the replacement level of 2.1 births per woman necessary to maintain a stable population. This decline is attributed to various factors, including:
1. Increased Education: Higher educational attainment among women often leads to delayed marriage and childbearing.
2. Cultural Shifts: Changing societal norms regarding family size and gender roles also play a role.
3. The overall trend indicates that most of Europe is experiencing a population decline, with immigration being a key factor in offsetting this decrease.
4. Even worse, a significant proportion of the illegal immigrants in the Continent are unskilled and are a burden on the economy. This will not change.
The key takeaways are population decline is happening now and will not change anytime soon. Immigration is now a toxic subject as far as the continent of Europe is concerned and it will be reduced.
A declining birth rate can have several significant impacts on the economy including:
A. Shrinking Workforce: A declining birth rate leads to a smaller working-age population, which can result in labour shortages. This can hinder economic growth as businesses struggle to find enough workers to meet demand.
B. Increased Dependency Ratio: With fewer births, the proportion of elderly individuals increases relative to the working-age population. This higher dependency ratio can strain public resources, as fewer workers support more retirees.
C. Reduced Consumer Base: A smaller population can lead to decreased consumer demand for goods and services. This can impact businesses, particularly those reliant on a growing customer base, such as housing, education, and retail sectors.
D. Shift in Market Needs: As the population ages, there may be a shift in demand towards healthcare, retirement services, and products catering to older adults, while demand for products aimed at younger demographics may decline.
E. Increased Social Security Burden: With a growing elderly population and fewer workers contributing to social security systems, governments may face increased financial pressure to fund pensions and healthcare for retirees.
F. Tax Revenue Decline: A smaller workforce can lead to reduced tax revenues, making it challenging for governments to maintain public services and infrastructure.
G. Potential for Innovation: A declining birth rate may encourage businesses to invest more in automation and technology to compensate for labor shortages, potentially leading to increased productivity.
H. Focus on Efficiency: Companies may prioritize efficiency and innovation to maintain competitiveness in a tighter labor market, which can drive economic transformation.
I. Economic Stagnation: Prolonged low birth rates can lead to economic stagnation, as a shrinking population may result in lower overall economic activity and investment.
The key takeaways are less working people will have to support the more elderly population whilst enduring a miserable economic situation. Simultaneously there will be a labour shortage, falling tax revenues, etc.
About the only thing governments can do is to encourage women to have more babies and quickly. Good luck with that!
So what is the solution? As far as I can see the answer is humanoid robots because they can function in our spaces and use our technology and tools. I am not alone in this belief; there are countless companies developing robots from giants like Tesla to minnows on the AIM market.
Robotics are now commonplace and they will become evermore so. Already robots are integrated with AI technology, work in manufacturing and logistics, work with human co-workers, perform surgery and more.
Humanoid robots are now well established both in standard work situations and, especially in Japan, in the care and health industries.
So we have a solution. Robots can do many of the mundane tasks in factories, logistics, hygiene and cleaning, health and care environments. Low-skilled human workers will not have jobs because robots will replace them, be highly productive and, through economies of scale, ever cheaper to buy.
This gives the opportunity for people with low skills to learn better skills so they can get more rewarding jobs. If they don’t take these opportunities their future will not be one filled with financial security. It’s a sad fact of economic change that there is no optimum solution but only choices made by necessity.
However, the labour shortage due to population decline can and will be overcome, productivity will increase and the restrictive and destructive practices of trade unions will be greatly reduced if not eliminated. No more train driver strikes, no more baggage handlers strikes, no more binmen strikes, etc. A bonus!
Key takeaways: The future of robotics is poised for significant advancements, particularly in 2025, driven by innovations in artificial intelligence and automation. As industries continue to adopt these advancements, the role of robotics in everyday life will expand significantly.
The relatively obvious bit: As I know little about the intricacies of robotics (and care even less) the obvious choice is to invest in a Robotics ETF. My choice is ARK Artificial Intelligence and Robotics (Acc) – stock ticker ARCI. My choice and not investment advice; always do your own research.
So, on to the leap of faith! Mobile and humanoid robots cannot be plugged into the mains supply. They need batteries and the only clear choice is lithium batteries.
During the Grubble (Green Bubble) the price of lithium spiked as EVs were pushed to the hapless voters. Once the penny dropped that EVs were not attractive to the general Market lithium prices tanked. Which is where they are now.
I believe the rise in robotic workers will drive a rise in lithium prices.
A lot of lithium can be found in African states. Those states are riven by corruption, inter-faction strife and are unstable. Far better to look for a European lithium investment of which there are three.
Which brings me on to Savanna Resources listed on the UK AIM and operating in Portugal. Some blurb follows:
Savannah Resources PLC has recently made headlines due to positive developments regarding its Barroso Lithium Project in Portugal as follows:
Assay Results: The company reported a final batch of assay results from phase two of its definitive feasibility study drilling program. These results confirm the grade and consistency of lithium mineralization across the deposits.
Resource Upgrade: Savannah Resources anticipates that the new resource estimate will represent both an upgrade and expansion of its current resource of 28 megatonnes at 1.1% lithium oxide. This estimate will form the basis for the project’s maiden estimate, which is crucial for the definitive feasibility study and future financing.
Drilling Progress: A total of 103 holes have been drilled, covering 12,490 meters. The latest results come from the last 23 holes drilled, which have shown promising intersections of lithium mineralization.
Market Reaction: Following the announcement, shares in Savannah Resources rose by 7.1%, closing at 3.77 pence in London.
Future Plans: The company plans to update the JORC resource estimates for the Grandao, Reservatorio, and Aldeia deposits, and will also introduce maiden exploration target estimates for the Pinheiro and NOA deposits, along with a regional exploration target.
These developments indicate a strong potential for Savannah Resources as it continues to advance its lithium project, which is vital for supporting the growing demand for lithium in battery production
Back to my blurb now. Savanna is a tiny company with huge potential. My guesstimates indicate at least a doubling of the current share price within a year. Within two years an eight to tenfold rise is not infeasible
But mining is a capricious business. Lots of things could go wrong and the share price could collapse.
I have taken a modest position with Savanna but it is a sheer punt. If you like my reasoning and follow suit I’d suggest the amount should be small and will not impact your life if the shares become valueless. I made the decision to pay no more than 5p a share because I have the suspicion that it will be volatile. Actually I waited and got them at just over 4p each.
Also, penny shares can be illiquid and hard to sell quickly.
Again it’s my choice to buy Savanna and the price I would pay and not investment advice. Do your own research…always, always research before buying any asset.
It’s just over a decade since I blogged about the Golite Poncho Tarp and in that time I’ve gained a reasonable amount of experience with a number of poncho tarps so I thought I’d update my thoughts about them. In particular I’ll summarise the Golite and discuss the MLD and ZPack offerings plus a few others.
All poncho tarps offer the backpacker with a minimum of three things; a waterproof layer when walking, a pack cover and a shelter to sleep under. That’s a lot of functionality for your ounces or grams so they are extremely tempting for the lightweight and ultralight hiking fraternity. Some also offer further functions too and they can be seriously tempting.
However, anyone wishing to use one has to be aware that they do have limitations. Firstly, they can billow in high winds so a simple shockcord belt is essential. Secondly, a long poncho can obscure your footing so a belt becomes doubly essential. Thirdly, they are best suited for open land as catching the poncho on shrubs is not fun and potentially problematic as your shelter can get damaged. Finally, as a shelter they are small but flexible which means practice is required before actual use to get the best performance of the shelter for the conditions.
A poncho will keep you dry regardless of how heavy the rain is because it is a non-breathable layer so cannot ‘wet out’. This allows the user caught in a heavy storm to wait it out in relative comfort as they bask in their own microclimate.
However, when hiking the effort causes our bodies to heat up and we perspire so many people wonder if a non-breathable barrier is a good choice – it is! Ponchos naturally have lots of ventilation at the sides and underneath so most perspiration just vents away. I’ve been very slightly damp a couple of times but never wet.
What will get wet are the wearer’s lower legs and lower arms. They are uncovered so the choices are either put up with it or wear chaps/kilt and waterproof gauntlets. I wear Mountain Laurel Design Chaps made from Silnylon and they are excellent- again perspiration just vents away. For my arms I either just let them get wet or use a pair of British Army Goretex Gauntlets I paid £4 for at a market stall.
Two general points about using ponchos as a shelter. Most importantly, ponchos come with tabs and some come with grommets. My advice is to avoid the ones with grommets (especially the cheap Chinese ponchos) as they always rip out or add in your own tabs before using it for real. The second point is about attaching guylines. Most ponchos have no way of storing attached guys so they have to be taken off for hiking. While you can use your prowess with knots it is far, far easier to use mini carabiners with a line loc at the peg end……cold fingers and knots are not a fun combination while added winds and rain bring a new meaning to hell on Earth.
So that’s the generic comments. Now on to the different models I use.
Golite Poncho Tarp. The specs can be found in an earlier blog post. Sadly, Golite went out of business so these are now as rare as hen’s teeth. If you see one, grab it! It’s an excellent, hard-wearing bit of gear with a size large enough to allow many different pitch configurations.
Mountain Laurel Designs Silnylon Pro. In my opinion the best poncho tarp you can buy. Mine unfolds to give a rectangle 9ft long which is longer than any other poncho I’ve seen. That extra 18-24 inches makes a huge difference in shelter mode.
In the traditional A-Frame setup it is possible to block off the foot-end and still have plenty of room to be under cover and not get damp feet. As a half-Mid the coverage is excellent with bags of room.
As a rain jacket it performs pretty much as any poncho but with the best, peaked hood I’ve ever seen.
It is extremely well made and tough. A recommended poncho tarp worth every penny.
Zpacks Poncho. Made from DCF, very light, very tough, easily repaired but short. Totally waterproof but, because it’s so light, it’s a real pig to put over your back when wearing a pack. Also DCF doesn’t pack as small as silnylon. If weight and durability are your main concerns it’s a winner. Can’t be used as a shelter.
Sea to Summit Silnylon Poncho. Very light and about the same size as the Golite. A capable bit of rainwear and shelter. It’s nothing outstanding but good in both modes plus it has a small pack size.
Conclusion. If you can bear the cost the MLD is the best on the market. If you want a much cheaper but reliable alternative the Sea to Summit will do the job. If weight is key then the ZPacks wins but has disadvantages.
Be aware that any poncho-tarp is not the best option for 4-season backpacking and could be downright dangerous in truly adverse conditions. That being said using one in reasonable conditions is a lightweight delight.
As I write Tesla is down by 44% over the last 3 months. It’s current price is $215.91, the EPS is $2.23 and the P/E is 100.7. I’ll explain this witchery after a couple of images.
Tesla Share Price. Tesla Basic Data.
P/E means price/earnings ratio so it would take 100.7 years for the share to pay you back the price you paid.
P/E ratios vary on sector and stock but a traditional ‘rule of thumb’ is a P/E of 12-18 would be ok, below that the asset is undervalued and above is overvalued.
For ease of arithmetic if the P/E of Tesla followed traditional measures and was 20 a reasonable price would be 20 = Price/EPS aka 20 x EPS = Price.
This gives a fair price of roughly 20 x 2.23 = $45. As the current price is roughly $216 the conclusion is the current asset price is unsustainable.
This is a rough and ready approximation and, in real life, there are other factors to consider. Looking at those I can’t see much support for Tesla until it hits the $190 level (and then it is still massively overvalued). Possibly much lower.
It is worth remembering that the current USA market has been driven by the Mag7 of which Tesla is a major contributor. The S&P and Dow with those stocks removed have not had stellar performances.
Also, given time, all markets return to the mean. Always have, always will.
As Trump had refused to discount a recession and is not interested in the markets as they are going through a ‘transitional period’ I believe it’s the time to look at the ‘sin stocks’; defence, tobacco, gambling and booze along with health, pharma, commodities and suppliers of basic necessities.
Actually I already have rotated into these and they are showing a decent gain. Your ethics might preclude you considering any of the above but that’s your decision. If you don’t like tobacco then don’t buy BAT or similar.
As always do your own research and don’t take my ramblings as advice.
America prides itself on being a Christian nation, the land of the free, truth, justice and the American Way. A message that is relentlessly pushed by Hollywood, American TV series and its media. The message is freedom, democracy and human rights for all.
As Zelensky’s treatment at the hands of Vance and Trump shows this is simply not true. What the world saw was as extreme version of the Monroe Doctrine married with the American traditions of protectionism and greed.
The Monroe Doctrine has shaped American foreign policy since 1823. Initially it was a fairly benign concept and boiled down to the proviso that if foreign powers didn’t interfere with America then America wouldn’t interfere with those countries. Actually, it had to be benign as American didn’t have a military power worth speaking of.
Over time the Monroe has been reinterpreted several times to allow the USA to exert its influence over the northern hemisphere, the Americas and pretty much the rest of the world as it confronts Russia and China. To do this it had to increase its military power and covert intelligence to incredible levels.
So now we have a country invaded by an enemy of America. Russia has has raped, injured, tortured, enslaved and murdered Ukrainian civilians during its illegal invasion as well as maiming and killing Ukrainian military and devastating cities.
And what does America do? Does it side with the invaded? Does it use its undoubted military and economic might to back up the truth, justice and American Way malarkey?
No, it sides with a sworn enemy to get its hands on Ukraine mineral assets for nothing except a few token American workers who will, apparently, ensure peace between Russia and Ukraine.
Because Zelensky is understandably sceptical of this he is publicly berated and kicked out of the White House by the President of the United States and his lapdog JD Vance. To finish the job they call Zelensky, a democratically elected President of a free but invaded country, a dictator.
The current Protectionist of the United States has threatened, and continues to threaten, supposed allies and neutral countries with trade tariffs that can be imposed or removed at the whim of a tantrum. Two can play that game.
But even the lowliest worm turns. The world, and especially the continent of Europe, has seen how America treats friends, neutrals and enemies. Bullying your friends and neutrals to asset-strip them while kowtowing to your enemies is not a good look. The knowledge that the same could happen to you is a call to action.
Can anyone trust cheese-eating surrender monkeys who would sell their principles for lucre?
Already the Governor of the Swiss central bank has politely brushed aside Trump’s threat of tariffs on the Swiss, our Chancellor is sending confiscated Russian reserves to the Ukraine and the nations of the European continent are now rearming themselves. In a few years the continent of Europe will be a full-grown military power and America’s influence will wane.
We now see America for what it is; mean-spirited, avaricious, vicious yet cowardly and devoid of a moral compass. It cannot be trusted; from the days of Woodrow Wilson (if not earlier) its foreign policy has been to enrich itself at the expense of everyone else.
For now America’s behaviour will continue to be tolerated until Europe has a stronger, integrated defence structure. But it will not be forgotten or forgiven.
Meanwhile, the Russians, Chinese, Indians and others have been busy setting up a currency system to challenge the dollar as America’s national debt balloons ever-higher. A direct threat to America’s wealth gained via foreign investment that funds its borrowing to live beyond its means.
As all empires do Pax America is now crumbling thanks to a toxic mixture of greed, over-inflated egos and incompetence.
As I write the world is probably at its most unsettled during my lifetime and I expect 2025 to be a turbulent year at the very least.
I’ve tried to capture my predictions as I’ve gleaned information from numerous financial and news sources (mainly Reuters as it’s relatively unfiltered). I’ve also tried to prevent my own political and economic views intruding.
Nevertheless, I am a Classical Libertarian by instinct, maybe even a Minarchist. For brevity this means I’m for personal liberty provided it does no harm to others, suspicious of all government-funded activities due to the inherent inefficiency of them and a conservative approach to economics and monetary policy. Note the small c – I have very little sympathy for the current Conservative Party.
I’ve been an active investor for over three decades and I tend to believe the reasoning of people involved in the markets rather than the news. It’s my experience that putting your own money on the table makes one more clear-eyed than any other motivation. Of course all of this means I do have a bias – just like everyone else! It also means my predictions are based on economics and finance.
When I was a starry-eyed teenager I did believe in socialism as a way forward but I soon came to realise that the Left’s view is well-meaning nonsense doomed to failure. I could write a reasonably sized book on why my views changed but perhaps the pithy quote “The trouble with socialism is that, sooner or later, you run out of other people’s money” hits the nail on the head.
Without money neither the individual nor the state can achieve anything. If an individual is broke they have no control over where they live, their healthcare, education, diet or anything else. If the state is broke it cannot deliver essential services, fund defence or have a functional infrastructure.
Every socialist state has either crashed and burned or turned into a despotic, dystopian hellhole. Venezuela being the latest in the litany of failure.
Capitalism won the argument but nowadays I feel both socialism and capitalism are merely irrelevant 19th century thinking.
The world has moved on and the choice now is between a restrictive globalism and the responsibility and freedom of individualism be it a person or a nation. Being free does not negate duty nor isolate a person from the consequences of their actions.
Speaking of actions and consequences, a warning! In this post I will mention politics and trends and how I believe they will affect markets, stocks and society. I will identify various assets I believe are ones to watch but they are my opinions and NOT advice.
Do your own research and act as you see fit afterwards. Your conclusions may well differ, your risk:reward ratio is not mine and you can lose money as well as make it.
1. America:
The American economy and geopolitics have implications for the world. Always have and will do for many years to come.
President Trump will start his second presidency soon. During his last term he actually achieved a significant proportion of his promises to the electorate before Covid came along. I have no doubt he will continue his mission to MAGA unless we are unlucky enough to be hit by another pandemic or equivalent catastrophe.
He managed to get Europe to actually consider funding their commitments to NATO, warned the EU and German in particular about their reliance on Russian energy, made some progress with North Korea, cut American youth unemployment (especially young black unemployment), started on an effective way to cut illegal immigration and, in general, presided over a growing USA economy.
In short, whether you love or loathe him, Trump was an effective President for much of his tenure who did what he promised to do. People tend to forget this and concentrate on the orange tan. This is, I believe, a mistake.
As the dawn of his second term approaches it seems that Denmark has paid heed about defence and is now investing in defending Greenland. The major EU countries have likewise recognised that their lack of military capability is now dangerous. Meanwhile the British sellout of the Chagos islands seems to have been stopped as it directly affects American strategic priorities. All of this has been widely reported in the press.
But Trump will face real economic challenges this time. The American national debt is eye-wateringly high, their stock market is driven by the Mag7 (formerly FANNGS) stocks which are hugely overvalued, there are challenges to the dollar as the global reserve and last, but not least, the Fed.
It’s no secret that Trump wants to sack the head of the Fed and the head doesn’t want to go. It is very likely we will see a similar play to that which deposed Truss in Britain and neutered Varakis and Draghi in the EU.
Make no mistake. We are not ruled by elected politicians but the bond market. Because of the huge borrowing by all Western Governments (financed by bonds) the central banks and market calls the shots and can depose leaders or force them to change policies. This is not new; it started with Clinton and the bond vigilantes. But what is new is the sheer amount of debt in western economies which gives incredible power to the central banks.
If the Fed wins we will see a lame-duck presidency and political blood-letting amongst the Republicans. if Trump wins we can expect foreign policies in line with his MAGA vision including a much more protectionist trade stance. We can also expect to see Musk’s DOGE change the fabric of the American public sector and a much stronger commitment to NATO by the EU member states.
My gut feeling is that Trump will beat the Fed and we will see a muscular defence of all things American. Expect a mercurial ride!
I believe that USA small-caps and defence companies will do well in the coming year. Lockheed Martin have had a torrid time recently due to Musk’s criticism of their latest fighter but I’m watching the stock carefully for signs of a revival. Also, Berkshire Hathaway have had a bit of a stumble recently but I would never bet against the Sage of Omaha.
2. The EU.
Undeniably in deep trouble; thanks to Brexit it is deprived of one cash cow while Germany and France (who are the other two main cash cows) are mired in political and economic problems.
The Germans are likely to go more centre-right after their elections in February so I would not be surprised to see them exit the EHRC. Whether they do or not it’s clear they will start demigration. German industry is stagnant at best and I can see them offering a trade deal with Britain outside of whatever the EU diktats are.
In addition the German green energy policy is in tatters and beholden to Russian gas (https://jacobin.com/2024/10/germany-green-energy-transition-lab ). This article is written from a Left perspective but covers the salient points. Indeed the Financial Times reported that the Norwegians describe energiewende as a ‘shit show’ and, along with Sweden, are refusing to consider more pipelines to access their energy supplies. Expect Germany to reverse its energy policies as quickly as possible in 2025.
France is stuck in political limbo. Macron can cling to the presidency but he’s stymied. The French systems of governance will allow the country to continue as is for now but nothing will be done to address their economic woes, social unrest and illegal immigration. I don’t see much joy in France for some time.
Meanwhile Hungary continues to be a thorn in the side as it will not yield to the EU’s demands on accepting illegal migration. Poland is similar as are the Spanish and Italians. Expect a more robust policy aping the Germans demigration.
The economies of most EU states are weak, their industries suffer from low productivity and they are bound by both a single currency and a central bank rate so they can’t change despite the mismatch between sovereign countries.
EU trade is quite difficult to untangle. Firstly, there is significant intra-EU trade which shifts euros around but little else. Secondly, trade outside the bloc varies greatly between individual EU countries. Thirdly, trade figures are usually given in percentages of GDPs which will show rises due to inflation even if trade remains static. This is exacerbated by currency rate changes between the Euro bloc and the rest of the world. A few brave souls have untangled the stats https://www.euronews.com/business/2024/11/14/what-europe-can-learn-from-the-us-about-growth-says-imf-report
A steady and prolonged EU decline in trade
Nevertheless it is clear that Germany depends heavily on non-EU trade, and especially with the UK and the USA, which provides extra motivation for them to consider a tariff-free deal with both the USA and the UK. Whether they do or not the question will provoke political discord both in Germany and the EU.
Expect a more EU-sceptic and centre-right political view to emerge in 2025.
3. Great Britain.
As many countries in the world are shifting to the political and economic right GB is an outlier. We have a new government that is very left of centre.
The budget is only a few months old but the indications are not good. Job vacancies are falling, foreign investment likewise, there has been a large outflow of foreign money, it seems that some tax rises will cost more to collect than they bring in, the public sector workers have been given huge wage rises but aren’t satisfied, there is great discontent over the abolition of the winter fuel allowance, waspI compensation and inheritance tax changes.
Starmer is in a bind. He can’t sack the chancellor because if he does then he will fall too. His only hope is that the large majority he holds stays the course and things get better. But there is discontent amongst his MPs that reflects the public discontent. Expect divisions in the Labour Party.
Also he has appointed a pro-EU ambassador to the USA and is essentially trying to reverse Brexit by subterfuge. I doubt this will play well with President Trump. Neither will the written comments that the ambassador and other Labour luminaries have penned about Trump.
My prediction is that the Reeves’ budget will be revised in the next three months or so. Nevertheless the people of Britain will endure higher inflation, job losses, lower taxation revenue, lower interest rates and more borrowing regardless of whatever tinkering is done. The British will become poorer.
I believe it is possible that Trump will offer a tariff-free deal to Britain for several reasons. Firstly, our economies are similar. Secondly, the opportunities for both countries are good. Thirdly, we have a century-long history of being good allies. Fourthly, should we accept the deal it would add significant pressure for the EU to accept a similar deal. This is advantageous for America. The fifth reason is that Trump likes the UK, especially Scotland, and the Royal Family; personal views influence negotiations.
The question is whether Starmer would take it? My view is that he would be a fool not to. Our future lies with being a global trading nation and not an unofficial member of a failing federation. Sadly I fear the offer would be declined.
As an aside there’s an interesting social experiment going on. Argentina has had a new government for a year. It is a polar opposite of Britain’s hard-Left government and SPADs. Their government is right-wing in terms of economics and has cut the public sector significantly, cut taxes and introduced lower tax-rate competition between areas, freed up price controls and so forth.
The results have been impressive; public approval has increased slightly, inflation has been cut to around 2.4% a month (sounds bad but a lot better than a year ago), 10% more of Argentinians have been lifted out of poverty levels and there’s more well-paid jobs thanks to private investment.
The Argentinian President readily admits that more needs to be done and he’s cracking on with it. Not for nothing did the now-President campaign with a chainsaw in his hand!
Meanwhile the British government is steadfastly pursuing a traditional Labour tax and borrow plan. My prediction for Britain is above and I predict that Argentina will improve further in 2025.
Amusingly, Starmer is now ordering the various watchdogs for various utilities, FCA and the like to come up with ideas for efficiency gains. I do wonder what the point of this is; surely he should be talking to the leaders of those industries rather than the Quango regulatory bodies?
I also wonder why he didn’t address this on the first day of his prime ministership. Our national infrastructure is in need of serious repair while its current state is detrimental to any hopes of economic growth. My feeling is the order is an act of desperation triggered by some SPAD.
However it’s clear the Starmer way is yet more state interference rather than actually doing something.
Then there is the elephant in the room. Nigel Farage and the Reform party he leads. He is an ex-commodity trader, an extremely effective political figure with vast experience in the EU as a MEP, now an MP, led the Brexit movement (although he couldn’t stop the neutering of Brexit in the House of Commons), has an uncanny knack of being able to get his point across to the public, drinks real ale and smokes cigarettes. On top of that he is friends with Trump and Musk.
A real bête noir to everyone on the Left who, from what I read, are suffering something akin to Trump Derangement Syndrome (TDS). Let’s call it FDS.
I follow a non-political investment source that he contributes to and there’s no denying his experience as a trader means he knows what he’s talking about. He comes across as an informed, shrewd, intelligent man who thinks clearly and is decisive, pragmatic and clear-minded.
You may love, hate or be indifferent to Nigel Farage but there is no denying his influence on the British political scene. As I write the Reform Party is really gaining strength and is, arguably, now the largest opposition party.
The council elections in May will be a test of transforming numbers into voting reality. My prediction is that Reform will make significant gains over the rest of our parties and will gain control of a number of councils. Enough to make both Labour and the Conservative parties sweat.
Sweat they might but I doubt either will change course or do anything of significant effect.…apart from blather on as usual.
4. Geopolitics.
The war in Ukraine will end in 2025 with Russia keeping its gains. Domestic politics means that it is impossible for Putin to exit without a significant win.
Isreal will not cede control of Gaza and will continue operations against Hamas, Hezbollah, Houthi’s and Iran. The Israelis are winning and there is no reason why they should not continue to nullify their enemies.
In the Middle East I expect the normal things; tribalism on religious lines, despots and lots more sportswashing. Probably green washing too as it’s fossil fuels that keep the whole area from sliding into obscurity. Readers may think that harsh but, apart from oil, name me any Arab engineering, pharmaceutical or service companies – I bet you can’t. The vast wealth that has come from oil keeps the Middle East functioning and a good chunk that money of that will be invested in the West.
The continent of Africa is a mess. Tribalism is rife as is corruption, dictators rule the roost in many countries, the population is poorly educated and low-skilled and reliant upon foreign aid and investment. There are few exceptions but, as a whole, it will be the usual state of affairs. The Chinese will continue to be power behind the throne in countries like the Congo and gain yet more control over the supply of minerals and other commodities. This control will affect us in the West especially while we try to curb our emissions.
India will continue its own Industrial Revolution in 2025. The country has global reach now and some very strong industries including IT and manufacture.
Neither Russian nor China will change tack. The Chinese play a long game and Russia is firmly under Putin’s control. Any successor to Putin will be the same animal; MRGA to borrow a slogan.
Both Russia and China will continue to further their efforts to control the world’s energy supplies. Russia by oil and gas, China by controlling the countries who have the minerals and ores needed for energy, especially green technology.
On the positive side Russia’s economy is now under real stress, their military have been depleted by the invasion of Ukraine and, likewise, their armaments. The fall of Syria and the diminution of Iran will cause Russia real problems as their supply lines have been compromised.
Islamic terrorism will continue to be a clear and present danger either by the usual terrorist attacks or by undermining the West from within.
We in the West are at war whether we like it or not. The battlegrounds are cyberspace, energy, misinformation, religion and the physical attacks. But I doubt there will be a global shooting war this year.
5. Mega trends.
The development of green energy as is currently envisaged will be abandoned (or severely curtailed) globally with the possible exception of Britain. It is unaffordable, causes huge but hidden environmental damage, is not ‘always-on’, hard to integrate with existing distribution grids and requires an incredible amount of battery storage to cater for times when the sun and wind don’t oblige.
The Danes recently asked for tenders to build new underwater infrastructure. They received zero tenders and will try again; appropriately on April Fools Day in 2025.
It is almost inevitable that the global focus will shift to nuclear power. It’s been working perfectly well in France for 25 years, AI companies are already investing in it to meet their massive power requirements.
Expect a focus on nuclear and especially SMR technology.
The next mega-trend is AI. Already established as a useful tool its applications will grow and grow in every sphere of human activity. It’s even in mobile phones now. Expect AI to become a common conversation piece over 2025. Probably the thing that might keep the Mag7 valuations elevated. Then again the old maxim of the time to drop an investment is when everyone is talking about it might come into play.
The third mega-trend will be quantum computing. This will be driven by the need for evermore powerful computers that are much faster and less error-prone than existing computing. Development will be driven by AI needs.
The company Quantum Computing (listed on the NASDAQ as QUBT) has enjoyed a 2,700% rise over the last three months. I feel that this probably very frothy due to hype and over-anticipation but it indicates the interest in the area. Google have also made great advances in quantum computing. Here’s a graph showing recent performance of QUBT with the y-axis showing percentage change.
QUBT recent growth as %
6. Society
As the political views in the West change to a clearer focus on defence, self-sufficiency in energy/food and economic prudence so will social attitudes inevitably change. There will be much greater scepticism about the long-established political parties, their policies and performance.
There is general dissatisfaction across the European continent about the current state of just about everything state-controlled. Everything from health/socialcare, education, energy to illegal immigration is being questioned. While different countries within the EU, or outside it, will have different priorities the same trend is evident. A casual read of the media shows this is current. I believe this trend will increase.
Of course the Left call this trend ‘Far-Right’ but it is not. Far-Right is a term designed to scare the witless rather as the Bogey Man scares children. The dissatisfaction is a reaction to decades of hard work and taxation to fund things that simply do not work as they should while traditional values and customs are traduced.
The days of wokery are numbered and I believe the ideology will be seen as the idiocy it is starting in 2025; much as BLM was an irrelevance invented by the far-left to sow discord. The truth is very few people care what other people’s sex or sexuality are, the same applies for colour or race, gender is merely a grammatical construct while sex is binary, transgender people have exactly the same legal rights as every other citizen and micro aggressions, triggering and being offended are something for individuals to deal with as adults and not society at large.
If you inhabit the silos of left-wing Twitter you may believe otherwise but those of us in the real world see differently. The world’s population is a not a cesspit of hatred.
Yes, of course there are those who have bigotry and violence in their psyche but they are the minority.
The same change will happen in the corporate world. Currently hectored by activists into the environmental, sustainability and governance ideology (which is at best pointless and at worst a needless drain on resources) will be abandoned although lip-service will be paid to it for a while.
7. The Markets.
Markets have cycles with rises and falls. When people are optimistic then luxury goods are purchased, when people are struggling luxury goods don’t sell well. In between the maximum and minimum there are riding and falling trends. That’s simplistic but illustrates the point.
There are some that maintain that we are in a post-cycle world but I am not one of them.
Most western countries are entering the decline phase so I predict a rotation into more defensive stocks and smaller companies will do well. Think of suppliers/producers of goods that other industries need and their market has multiple income streams.
For example a brick maker like Ibstock Brick supplies most builders in the UK so they’re well insulated from individual builders going bust.
The ‘sin’ stocks will probably be a safer haven and usually offer a good dividend; tobacco, booze, oil, utilities and defence. BAT for tobacco, Diageo have done poorly but might be worth watching, Shell/BP and BAE.
I suspect the Mag7 will not see the same growth as previously; their valuations might become more sensible due to market corrections but I doubt they will crash and burn. Markets always return to the mean sooner or later.
The UK stock market will continue to trade pretty much sideways over the year although I expect a bad first and second quarter, the US market will outperform and the European markets will have an aggregate small decline over the year.
As far as I’m concerned the place to put your hard earned cash is in reputable American small caps that have a good track record of stable growth and rising dividend payments.
If you want to stay with large caps then it’s the Dow Jones for me. For the first quarter of 2025 (and probably beyond).
A good contrarian play might be the ‘Dogs of Dow’. The Dow Jones Index is the thirty largest stocks in the American market while the Dogs are those ten with the highest dividend yield on January 31st. Any web financial source will allow the Dogs to be easily identified but Verizon and Johnson and Johnson are currently in the Dog house. https://indexarb.com/dividendYieldSorteddj.html note that 28 stocks pay dividends .
The Dogs of Dow investment strategy was first put forward in 1991 and has performed well outperforming the index in most years. The last couple of years it hasn’t but various indicators indicate the possibility of a good year in 2025.
The idea is to split your spare cash into ten equal amounts and buy each of the ten Dogs, and allow dividends to be reinvested. Then leave it alone until the end of the year – no more buying or selling.
But, you may wonder, why the high yield stocks the Dogs? The answer is for two reasons. Dividend yield is a percentage of the share price so if a stock is out of favour the share price will fall and the yield increases. When the stock comes back into favour the price will rise so you’ll see a capital gain and, in the meantime, your dividends will have purchased more shares at a cheap price.
The second reason is that the asset is a true dog that has low productivity, poor utilisation of profit and so forth. The price falls. In order to prosper it needs to restructure and multi-billion companies tend to want to survive. It is likely the stock price will rise but your dividends will have purchased more shares at a low price just as in the first case.
In general green companies, unit trusts and ETFs had a peak in 2022 and have since tanked. As the green bubble is now well and truly burst I’d expect the commodities markets to trade within range for Copper, Lithium, Palladian and similar industrial metals.
Probably a modest rise in Uranium as people position themselves for a nuclear future. Yellowcake might be worth keeping an eye on for a very speculative investment although it is only just showing signs of a possible uptick after an adverse period.
Yellowcake. Short-term weighted moving average is above the medium and longer term WMAs. This can indicate an upward trend is coming.
Gold and Silver have had a good run for the last year or so and I believe that they are a bit toppy. I don’t expect major changes unless there is some major disaster or war in 2025. Basically they will behave as inflation hedges. Gold and silver have long track records in preserving the value of your money – they don’t make you rich but stop you going broke.
Definitely a long-term hold but anticipate fluctuations in the short term. PHAU and PHAG are reasonable ETFs to participate in the gold and silver markets. The standard advice is to hold 10% of your money in gold – physical gold has the advantage that you can run while carrying a lot of money, ETFs mean you don’t have the hassle of keeping it safe.
Oil is still vital but, again, I expect normal trading patterns.
Bitcoin, and other crypto, is becoming mainstream now. Below is a summary of items I’ve pulled from various sources.
Donald Trump has been clear he wants to make the US the “crypto capital of the planet”. He might establish a national Bitcoin reserve. Individual states are also getting involved in crypto. Mainly Bitcoin but some others too. Florida is taking steps to create its reserve early in 2025 while Pennsylvania is currently devising legislation which could see it holding Bitcoin. Michigan and Wisconsin have $11 million and $220 million respectively in Bitcoin via an ETF. Texas is following suit on Bitcoin.
I’d expect continuing volatility but with an upward trend – possibly a spike in mid-January or soon after. 94% of all Bitcoin has been already mined so I’d anticipate an upward trend on crypto.
MicroStrategy (MSTR on the NADAQ) has been a good way to play the crypto game and I expect it will continue to do so for some time. But it is volatile as seen over the last couple of weeks. As I write it has had a good thrashing and down 45% since November so now could be the time to buy? Or it could be catching a falling knife.
Food commodities could be an interesting area. Every day the world’s population increases, there is finite productive land and many countries cannot feed themselves without imports. I would expect the prices to reflect this by an upward trend which will be passed on to consumer prices. Another inflation driver! A major conflict could cause mayhem in this area.
One business that is pretty much recession and inflation proof is shipping. The global movement of goods is a massive market with ships having roughly 25 year operating lives. This means capital expenditure is amortised over a long time, there is significant scrap value in the vessels, a drop in trade can be countered by mothballing ships for a while, inflationary pressures are passed directly on to the customers and there is a known income stream for a reasonable time in to the future.
A shipping company that has caught my eye is TORM. Very reputable company making large profits, all debts covered by roughly three times from easily liquid assets and a current divided yield of 30%. However, the stock has declined significantly over the last three months. My suspicion is that it’s been aggressively shorted but, regardless, the decline seems to have stalled recently.
If you download an app like Trading212 you can opt to start learning by using ‘play’ money. This is a very good way to learn from your mistakes without any risk to your own capital. If you open a Cash ISA with that platform you’ll get 4.9% interest p.a. on your capital paid daily. And it will be tax-free.
At any time the Cash ISA can be converted to a stocks and shares ISA. Capital will attract the same interest rate but you’ll also be able to buy stocks around the world at a low cost.
Further, the platform allows you to buy fractional shares which allows you get the same percentage return as owning a full share. For example if you can’t afford to pay roughly £400 for a Berkshire Hathaway B share you could buy a tenth of one for £40. This is a great way for new investors to make gains to start their investing journey off. Reinvest your dividends and the laws of compound interest come into play- at first minimal but after a few years the effect is noticeable.
Like the cash interest all gains are tax-free in an ISA. I believe anyone with any spare capital should have a cash ISA at the very least because it will help to preserve the buying power of your money.
At this point I’ll reiterate what I wrote earlier. Any market or asset I’ve mentioned are my opinion and should not be considered advice or endorsements. You must do your own research- don’t take my view as gospel truth.
In general terms all assets can rise or fall in price so it’s possible to lose money so carefully consider your risk:reward ratio and never, ever use money you can’t afford to lose to buy investments.
So these are my economic, geopolitical and megatrend predictions for 2025. I’ll see in late-December 2025 how they’ve fared.
