Fact sheets arrive from 2 of our Asian managers, Arisaig and Pangolin Asia. They both reflect a broadening trend: green issues and ESG ("Environmental, Social and Governance"). Pangolin declares magisterially: "There is no place in this fund for those who wantonly destroy rainforest". My prediction is that best-in-class fund managers in future will cling to ESG as apishly as some now cling to their benchmarks.

Wall Street has never been "Easy Street" for idealists. One can assume that the hard heads of Nestlé, Unilever and Procter & Gamble have done their homework and know where true self-interest lies.

Language, as always, spells out the change. Nestlé has adapted "maximising shareholder value" to "creating shared value". P&G's new mission is "purpose inspired growth" and Kimberly Clark, not to be outflanked, now wants to "enhance the health, hygiene and well being of people everywhere, every day". Actions speak louder than words, and usually cost a lot more. Reckitt Benckiser's R&D side is now measured for carbon reduction. Alliance Boots board now has to sit through a 3 hour sustainability lecture every quarter. Sainsbury has tasked 5 Executive Board members to lead each of its 5 ESG strategies. P&G, aware that 80% of its energy footprint was stamped on its laundry products, leveraged its R&D budget to develop a cold water version of "Tide" detergent.

These corporate behemoths, hate objects of the rent-a-mob that sprays red paint on walls in Davos and defenestrates fire extinguishers from HSBC, have connected commercial advantage and good ESG behaviour. ESG saves money, builds brands and dodges embarrassing publicity.

Arisaig expect FMCG giants to promote corporate brands more than product brands infuture (P&G quantifies the "halo effect" to a 20% increase in purchasing intent). ESG sounds good both for business and the planet.


As Sherlock Holmes observed, it's often the dog that doesn't bark that shows what's going on. In August, BHP bid for Supply Inelasticity theme play, fertilizer giant Potash Corp. BHP argued it was paying top dollar at USD 130 a share but was scuppered by the Canadian authorities. But –surprisingly- Potash's price didn't crash. Today, it's 30% higher than the bid price. In the 2008 boom, potash prices hit USD 1,000 a tonne. Prices are now about USD 500 a tonne. The US Dept of Agriculture says corn planting will now increase by +4.5%, the largest planting season since 1944. And wheat farmers are increasing planting by +8.2%. Some dog, this one.


We're on trial for the Bank Credit Analyst. So in a week when the ECB finally jacked up rates (by ¼%) it's comforting to read in BCA that none of the 5 equity bear signals –monetary, valuation, economic, technical or Father Time- are flashing red for us bulls. Since 1949, the Year 3 of a US Presidential cycles has averaged +18.9% and has never shown a loss. Mirabaud Securities in London adds to my good humour. Their guide is multi-decade trend earnings. On this basis, European stocks can rise by 22% compound for the next 3 years. But there's also a sop to nervous market timers. "Sell in May", says Mirabaud..."but not before 2016."


I ring a client in Tel Aviv to check if the game-changing stories on shale oil in srael are true. "Not only true", he says, "but I'm close to the people involved. Do I want in"? Golda Meir said Moses led the Israelites to the one place in the Middle East without oil. But not without entrepreneurial spirit, it seems.


Writing client quarter end reports, I’m struck by how much last quarter's performance was like last year's. If you'd sold out mid March (or mid August) after a litany of truly dreadful news, you'd have missed out on the entire gain. It's another blow for the market timers and a vindication of a famously ESG-conscious fund manager who described his investment style as. "Don't Just Do Something, Stand There".