They say it’s the "squeaky wheel that gets the oil" but I think it’s the "oily squeeze that helps the Grease" (Greece, geddit?). Equity markets are racing toward their April highs, though Ms Cassandra, my bi-polar but curvy Greek technical analyst, says the real test comes some 3% above current levels, after which it’s "sell the farm" once again. We’ll see. Few analysts remark on the benefits of USD 30 off the oil price (a saving of nearly a trillion dollars a year to the Americans for a start). Can this be why they teamed up with the Saudis to ambush the oil speculators? Lower oil brings vast savings to consumers that require no US politicians or Greek trade unions to agree on anything, even the meaning of the word "austerity". Greece is not known for oil production, except of the "olive" sort (though its Aegean Sea prospection with Turkey might surprise us all), and it consumes way more oil per capita than it should (about 400k barrels a day). USD 80 oil would be better news still, but our Energy and Alternative Energy theme producers (Devon, Conoco, Gazprom, Shell) will prosper at USD 80, particularly as gas –in a different cycle to oil- is for many their brave new world.


It is indeed a brave new world when oil companies wear Eco-Warrior white hats. Shell CEO Peter Voser says global demand for fresh water may outstrip supply by 40% in 20 years. This is good news for our "Water and Ecology" theme, but bad news for the rest of us. Shell has answers; it now uses water recycling technologies in Brazil and elsewhere. Today’s water solutions use too much energy and create too much CO2. This has to stop. Some Middle Eastern nations use 65% of oil consumed at home to run desalination plants for fresh water. This is making the Persian Gulf saltier and is bad for ocean circulation and climate change.


Our Water and Ecology theme play Itron is a global leader in smart water meters, but the shares have been leaky of late. The water meter market is huge. 50% of electric meters in N America are 'smart', but worldwide use is only around 10% (similar numbers for gas and water). The EU’s 2020 Directive aims to reduce carbon emissions and energy use by 20% by 2020 and raise renewables by 20%. Itron will benefit by more than 20%.


Stamp trader Stanley Gibbons, our new Developing China and Ageing Population theme stock, hit rough waters this week. The Daily Telegraph revealed some over-aspirational promotional flyers and guarantees to larger stamp buyers that mightn’t be gold-plated. The article intoned that SG wouldn’t have passed the FSA’s good practice test (despite the fact that a collectibles trader like SG is as much subject to the FSA as, say, a Ferrari dealer is to the Bank of England ). Our recent meeting with the CEO went well. One worry is that recruiting several hundred thousand Chinese to SG’s new trading platforms presents execution risk for a firm not noted for techie innovation. SG may consider out-sourcing its e-strategy -so important to success in China- to a more IT-savvy firm like eBay or Amazon, keeping the philately and quality validation side to itself. But SG’s trading background is on a roll. At a recent auction, all Chinese lots found buyers and more than 60% of Chinese lots went for double pre-auction estimates (floral-philatelists rejoice that the ever popular 1964 Chinese Peonies miniature sheet went for a princely GBP 2,760). Happily for our thesis that the collectibles habit is spreading, a mixed accumulation of coins sold for more than five times its pre-auction estimate.


Lombard Street Research report that June may be 2011's peak rate of change in food prices. Recent declines in grains pencil this in. US farmers planted 100k more acres of corn than reported in the March Planting Intentions report (the market expected fewer, not more). In chart terms, the head of corn looks broken but an updated acreage report due in August must be scrutinized. A major factor that pooped the equity party in H1 (higher food prices in Emergia) is on the wane. Another reason, like oil’s greasy slide, to believe this rally.


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).