Gervais Williams has a strong track record as both a fund manager and author: previous lauded books have included “Slow Finance”, which looked at long-term investing in a short attention-span world, and “Small is beautiful”, which argued that investing in small caps was both good for returns and the economy more broadly.
His latest book, The Retreat of Globalisation, takes on more big beast investment issues: where is the investment world headed in an era of serious question marks about globalisation, populist revolts, and doubts over debt levels and the effects of quantative easing (QE)?
And is active investment management worth paying for in that world?
On the second question - perhaps unsurprisingly for a stock picker - he says it is, and his rationale is a corollary of the first set of questions.
QE and related policy has lifted stocks indiscriminately and boosted passive investment massively. In a more uncertain future, excess debt needs to be resolved and QE unwound. Williams says, investors are going to start having to look much more closely at the quality of companies (and management), their business models and ability to protect them, productivity growth, cash payback times and delivery of regular dividends; and in a resource-constrained world where the environment and ecosystems will matter for growth.
The book is a fascinating walk through the rise of passive and the threats and opportunities for stock pickers in volatile times.