Signs of "Green Shoots" are anxiously sought, and nowhere more so than in the temporary employment market. Our Swiss "Global Outsourcing" investment Adecco is its messenger. Good news –in the shape of a pick-up in temporary work- can appear bad to analysts who seek signs of full-time employment in order to light up their cigars. But although low margin industrial jobs still lead the way, office and professional staffing is now picking up, particularly in Germany. Either way, Adecco makes good money and we have bought some more shares. There is no need to shoot the messenger.


There is no lack of Green Shoots, or Bean Shoots, in China. Our "Developing China" theme food stocks have increased sales this year by an average of +20% and, we have been reliably informed, have no problem in passing on input or food price increases to the consumer. The government, however, has other ideas. After fining Unilever for talking too loudly about possible price increases, Beijing has "guided" Wumart, our Beijing food retailer, to buy its vegetables more directly from the farmer, avoiding the middleman. Since Wumart is a leader in direct purchasing in China, we are sure they will take the hint.


It is a well known fact that Owner Manager-led firms outperform Professional Manager-led firms. Gates, Jobs (at least the second time around) and Buffett show how this works. But there are few better examples than Swiss-based Kuehne & Nagel, which we hold as part of our "Global Outsourcing" theme. K&N is in the business of moving stuff around the globe efficiently and when economies recover, so does K&N. Klaus-Michael Kuehne is its chairman. It takes a lot for a man whose holding is worth CHF 9bn in a company he controls to step down just when economies are starting to get going. But Herr Kuehne richly deserves his retirement, having joined K&N in 1958 (when I was being efficiently moved around in a pram). Since he owns more than 50% of his firm, we trust that his legacy will be an extremely progressive dividend policy, for all shareholders. We feel that only then will he properly enjoy his retirement.


Nowadays, people mistake information for knowledge and very often knowledge for wisdom. The market place –Adam Smith's "Invisible Hand"- reflects my contention perfectly. I can download information from Google equivalent to the Library of Congress every day without paying a penny, but to find one good lawyer, or fund manager can cost a fortune and involve a lifetime's work. Try asking a lawyer for a download of his knowledge and you will meet a frosty stare. Try asking him for wisdom and he will up his charges to Senior Partner’s rates.


Monetarist statisticians contest that Bernanke is blowing a bubble and there is an 80% correlation between the size of the USD monetary base and the level of the S&P 500 since early 2009. This makes a certain amount of sense, but Dr John Hussman of Hussman Funds –a far better statistician than this writer- says this is a schoolboy error. Two factors, says Dr Hussman, may be relatively unrelated, except that they both share diagonal, upwardly trending and low volatility paths and achieve relatedness, as it were, by accident. Hussman goes on, "I guarantee that there's also a correlation of more than 80% between the height of a baby kangaroo in Melbourne and the cumulative number of eggs laid by a hen in Oklahoma since early 2009." Hussman’s reasoning still does not explain why the most relevant single factor to the USD / GBP exchange rate is the Icelandic Fish Catch. Nor how to seasonally adjust for the collapse in the GDP of Chad in the hot, dry months when the cattle, its main contributor, wander across the border. No doubt the cows are seeking those green shoots.


This diary (the "diary") is published by Global Thematic Investors Limited, a company domiciled in Hong Kong and incorporated under the Hong Kong Companies’ Ordinance on the 15th September, 2005. The diary is not intended for private customers and is written to be read solely by sophisticated investors, such as family offices, business corporations, banks and financial intermediaries. Statements are completely personal and may change without notice, are often forward-looking and therefore subject to uncertainty and risk. The predictions and forecasts implied may not subsequently be achieved. The diary is composed of information and opinion believed to be accurate, though this information may not have been verified. Funds or collective vehicles may only be open to certain persons in certain jurisdictions and may follow strategies that are speculative and involve a high risk of loss and may go up as well as down (a favorable performance record is no indication of future performance).