At GaveKal, we have argued at length over recent years that one of the driving forces of the financial markets was the “financial revolution” which was quietly moving from the US and other Anglo-Saxon countries unto the rest of the world. Today, this financial revolution seems to be, at the very best, “put on hold”. So what impact should that have on our investment decisions?

Just as importantly, this very important change to the investment environment is not the only paradigm-shifting event that has occurred since we published Our Brave New World (now out of print but available for free for download from our website) and The End is Not Nigh. And in periods of drastic change, it is easy to focus on the negative and be overwhelmed by the general media’s natural tendency to spread doom and gloom. And undeniably, there are serious reasons to be concerned:

• The financial revolution has hit a serious road-bump and will likely detract more from growth than contribute to economic activity for the foreseeable future.
• We continue to see, through rising oil prices, an ever greater amount of wealth transferred from market players to non-market players (i.e.: oil money to Venezuela, Iran or Saudi Arabia; growth in Russian reserves etc…). This is rarely conducive to faster growth.
• Until Asian central banks decide to bite the bullet and stop manipulating their currencies, inflation in Asia may very well continue to accelerate, prompting counter-productive price-control measures, constraints on bank lending etc…

Still, for every reason to be negative, we find some reasons to be positive. These reasons include the fact that more people are getting richer, and freer, than the world has ever seen, and all at the same time. The fact that these people all around the world are communicating, and exchanging ideas and goods in a way that would have been deemed impossible just a few years ago also engenders tremendous growth. The fact that companies are having to run ever faster, and become ever more efficient to survive and thrive is also positive for the global economy; Indeed, for most managements, complacency is no longer the option it was twenty years ago.

In this new book, we review both our concerns and the factors of growth around the world which contribute to our overall optimism. And, in so doing, we present our “investment roadmap” for the coming years.



When you buy 6 or more copies of this book, we will give a free copy for every two purchased.

Today’s global financial system is characterized by a curious mixture of freedom and manipulations. Between the two main currencies of the world, the US$ and the Euro, we have a free float. But between the dollar and a lot of other currencies, especially in Asia, we have a dirty float, or fixed exchange rates, the goal being to maintain the exchange rate at an abnormally low parity to the dollar.

To make matter worse, a lot of those countries (especially China and India) have decided to make their currency inconvertible. This would not matter if these currencies were small and irrelevant, but they are increasingly less so by the day. This state of affairs leads to profound price, and volume, distortions, some well understood (i.e.: the RMB is undervalued and can only go up) and some not as well understood. It also triggers a number of important questions. Namely:

• What distortions does the intervention of non-market players in the Asian foreign exchange markets engender?
• Are the distortions abating? Or accelerating?
• How long can those distortions last?
• If/when the adjustment comes, what assets will be most at risk?

Of all these questions, the last one is probably the most important. As we never tire of writing, money management is often more about avoiding the assets that implode, and diversifying amongst the rest, than about picking outsized winners.

While it may be tempting to adopt a very defensive posture in the face of such blatant distortion, there are many reasons to believe that the current overall positive growth environment will continue over the coming years. In The End is Not Nigh, we push some of the themes developed in Our Brave New World a little further and review the reasons that have led us, in recent years, to shy away from prophecies of doom and why we remain positive on global financial markets.

When you buy 6 or more copies of this book, we will give a free copy for every two purchased.

The most difficult thing in the world when one lives one’s whole life in one place is to go on seeing one’s surroundings as for the first time. I happen to have spent a lot of tine throughout my life in Paris and I am repeatedly struck by the astounded admiration of first-time visitors. The experience is the same for texts we have head too many times. We no longer know how to hear, or even to listen to, the voice of Christ which has become a sort of comforting purr. Moreover, we can hardly tell the difference between the original voice and the commentaries which accompany it. Yet Jesus’s words are supremely recognizable. They have a music, a logic, a gentle irony which belongs only to Him. Using His actual words is to free the jewels from their mount and let them adapt to a new setting.

This is my aim with this book. To listen to Christ’s words; and to listen to the message he has given us on how efficiently run our economic affairs.

Let me be clear and to put it plainly: what the Fathers of the Church, theologians or biblical specialists have thought, or still think, about Christ’s message in the economic sphere leaves me prodigiously indifferent. This is not a book about religion but one about economics in the light of the Gospels.

Many people, religious men or politicians, have used the Gospels as an excuse to defend socialism and government intervention on moral grounds. But, to my knowledge, few economists have done any work on the Gospels. Have the Gospels perhaps been over-studied and over-annotated by religious experts? By moralists and by philosophers? And not enough by economists and businessmen? The comments in this book will thus be put forward not in the light of my inadequate theological culture, but rather aided by an economic and political experience accumulated haphazardly over the years – years of reflection on how best to act in the modern business world.

And, in light of my experience, and upon re-reading the Gospels, I was struck by how Christ, in a few simple sentences, was able to tear down all economic fallacies and show that the best way is always that of freedom.

When you buy 6 or more copies of this book, we will give a free copy for every two purchased.

Nous sommes entres, depuis un certain temps deja, dans la troisieme grande revolution technologique que l'humanite ait connue. Apres etre passes de la cueillette et du nomadisme a l'agriculture puis a l'ere industrielle, nous entrons dans l'economie de la connaissance. Cette revolution aura des consequences incommensurables sur la societe et l'organisation du monde : disparition du modele social francais ; affrontement direct entre le modele individualiste anglo-saxon et le modele communautariste religieux islamique ; faillite de l'euro, la derniere tentative de superstructure monetaire totalement archaique ; fin de la plus-value industrielle au profit de la plus-value intellectuelle, etc. Mais les " princes " qui nous gouvernent refusent d'affronter cette realite. Par meconnaissance ou par malhonnetete, ils " vendent " encore au bon peuple une societe deja morte. Ils n'ont qu'un seul objectif : que le peuple continue de payer pour cette illusion. Et qu'une seule peur : que le " tiers-etat " moderne se revolte comme en 89. Pourtant, qu'ils le veuillent ou non, la revolution a commence ! Charles Gave pose son regard d'economiste et de financier international sur notre epoque : ses analyses sont violentes, precises, argumentees et pleines d'humour ; ses solutions radicales et d'une redoutable logique.

In recent years, we have seen companies become far more efficient in the way they use their resources, whether capital or labour.
This important change is not only having micro consequences but also has big macro implications, including a fall in the volatility of our economic cycle, a higher tolerance for debt, higher prices for assets... In Our Brave New World, we explain some of the important changes our world has gone through in recent years and try to draw some investment implications. This 130 page book was published in September 2005.

Currently Out Of Stock. Free ebook can be downloaded here (2.5MB, PDF).

Korean Version of "Our Brave New World"

Since launching GaveKal in late 1998, we have written a fair amount, and on a wide array of topics. In this book, published in November 2004, we compile what we believe to be our best writings and arrange them by alphabetical order. In over 500 pages, we review what we believe are some of the important economic rules investors should know.

When you buy 6 or more copies of this book, we will give a free copy for every two purchased.

Des Lions Menes par des Anes fut ecrit pendant l'ete 2002. Dans ce pamphlet, Charles prend a partie la technocratie Francaise et la Banque Centrale Europeene qui ne cessent de mettre des obstacles sur le chemin de l'entrepreneur francais.

Charles wrote this book, in French, in the summer of 2002. It was published by Robert Laffont. Des Lions Menes Par Des Anes tries to relate the hardships faced by the French entrepreneur in the current political and economic system. The pamphlet was a sleeper best-seller, selling just under 20,000 copies over a year in France.

Currently Out Of Stock. Please order at www.amazon.fr

"La seule forme de pensee economique qui soit conforme aux Evangiles, cest le liberalisme!"

Sur cette conviction forte et politiquement incorrecte Charles Gave nous livre un pamphlet court et decapant ou il analyse le texte des Evangiles en economiste qui a fait du liberalisme son credo.
? Venons-en a l'essentiel, c'est-a-dire a la question que nous posons, et qui est la suivante : si les Evangiles sont le fondement meme de notre civilisation, si vraiment ils sont de tous temps et de tous les lieux, alors, ils doivent avoir quelque chose a nous dire aujourdhui sur ce qui est moral en economie ! Ils ont peut-etre ete trop lus et commentes par des religieux, des moralistes, des philosophes et pas assez par des economistes et des financiers. ? affirme Charles Gave.
Ecrit avec fougue et mordant, Un liberal nomme Jesus, nest ni un livre de theologie ni meme un livre religieux. Cest lessai dun economiste qui croit que lhonneur du liberalisme a toujours ete de proteger les libertes civiques et economiques contre lempietement constant du pouvoir politique.

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The economies of Hong Kong and south-east Asia are dominated by only forty or fifty families. Their interests range from banking to property, from shipping to sugar, from gambling to lumber. At their peak, eight of the world’s two dozen richest families were south-east Asian, yet they are largely unknown outside the region. A complex mythology surrounds them, one which informs Asian views on culture, entrepreneurialism and economics. In this explosive account, Joe Studwell finds that the facts are even more remarkable than the myths, as he lifts the lid on a world of hypocrisy, power and enormous wealth.

Through the hidden lives of some mysterious and fascinating men, Studwell explores the broader economic and political issues facing a region of 500 million people: how the Asian tycoons took such a strong hold over their local economies, how they survived the Asian financial crisis that began in 1997, and what their endurance teaches us about the real state of the countries they live in. Joe Studwell has been a contributing writer to The Economist and was based in Beijing with The Economist Intelligence Unit. He is the founder of The China Economic Quarterly.

Please order at www.amazon.co.uk

For 700 years, ever since outsiders first wrote about the place, the world has believed there are untold riches to be harvested in China. More recently, with the rise of globalisation, the spread of capitalism, and the growth in its population to 1.3 billion, the belief in China’s unparalleled potential has taken on the order of an obsession. During the 90s, China astounded the world with double-digit annual growth rates while attracting over $300 billion in foreign investment. Politicians, economists and business leaders everywhere foresaw in China a market for goods and services to dwarf all others.

In this thoroughly researched and engaging book, Joe Studwell provides a provocative analysis of the `China Dream’. He takes to task these predictions of growth – and instead foresees an economic crisis for China in the wake of the foreign-investment gold rush of the last ten years. A crisis that will destroy the hopes of outsiders realising their investment dreams. Joe Studwell has been a contributing writer to The Economist and was based in Beijing with The Economist Intelligence Unit. He is the founder of The China Economic Quarterly.

Please order at www.amazon.co.uk

Trustee Investment Strategy is written by Chris Russell (Chris has been part of the GaveKal effort in the UK since 2002). The book is a practical guide for the trustees of endowment and foundation assets. The book explains the principles of investment and risk, and of constructing investment and spending strategies, in the context of an endowment fund’s short and long-term aims and objectives. It considers all strategy elements, including non-financial, as part of an holistic process: one where the whole is greater than the sum of its parts. The book also contains a comprehensive glossary of investment terms. A synopsis of the book, together with endorsements and the foreword by George Keane, President Emeritus of the Commonfund Group, can be seen on the book’s website: www.tisef.com.

Currently Out Of Stock. Please order at http://www.tisef.com/buy.html