The very well connected Lord Rothschild Chairman of RIT Capital.Annual Report...1/3/16... 'There’s an old saying that in difficult times the return ofcapital takes precedence over the return on capital...'
In my half-yearly statement I sounded a note of caution,ending up by writing that “the climate is one where thewind may well not be behind us”; indeed we becameincreasingly concerned about global equity marketsduring the last quarter of 2015, reducing our exposure toequities as the economic outlook darkened and manycompanies reported disappointing earnings. Meanwhilecentral banks’ policy makers became more pessimistic intheir economic forecasts for, despite unprecedentedmonetary stimulus, growth remained anaemic. Notsurprisingly, market conditions have deteriorated further.So much so that the wind is certainly not behind us;indeed we may well be in the eye of a storm.The litany of problems which confronts investors isdaunting: the QE tap is in the course of being turned offand in any event its impact in stimulating asset prices iscoming to an end. There’s the slowing down to anunknown extent in China. The situation in the Middle Eastis likely to be unresolvable at least for some time ahead.Progress of the US and European economies isdisappointing. The Greek situation remains fraught withthe country now having to cope with the challenge ofunprecedented immigration. Over the last few years wehave witnessed an explosion in debt, much of itrepayable in revalued dollars by emerging marketcountries at the time of a collapse in commodity prices.Countries like Brazil, Russia, Nigeria, Ukraine andKazakhstan are, as a result, deeply troubled. In the UK wehave an unsettled political situation as we attempt to dealwith the possibility of Brexit in the coming months. Therisks that confront investors are clearly considerable at atime when stock market valuations remain relatively high......
Plenty more here http://www.ritcap.com/media/annual-report-2015.pdf