A select set of active managers who run concentrated portfolios and patiently hold their positions have been shown to significantly outperform over the long term. With passive strategies set to be challenged in the next decade, investors need Active investing avenues now more than ever.
While the risks from Tencent being based in China are salient in investor’s minds at present, with many Chinese tech stocks seeing material share price declines, we believe over time the narrative will refocus on the positive revenue and earnings developments that should spring from Tencent’s optionality.
The question of inflation brings us to a larger ongoing debate on the merits, or otherwise, of an increasingly popular idea called Modern Monetary Theory (MMT). The core idea of MMT is that governments who issue debts in their own currency can never default. After all, they can always print money to repay their debts, if needed.