Gervais Williams is a successful fund manager with a good track record in managing UK equity funds. As a result, he has won a number of industry awards and recognition and this is his third book with a common theme about the challenges facing financial markets.
This is very much a book of two halves. The first is a fascinating analysis of the global economic drivers of investment returns over the pre and post financial crisis eras. Despite it all, the world has been lucky in the circumstances.
Markets have made extraordinary – and unrepeatable – returns since 2008 and obscured the dire absence of productivity growth since the dotcom bubble burst. While the world reeled from the aftermath of the global financial crisis, China came to the rescue with vast injections of capital.
Western governments helped them along through their quantitative easing programmes and the overall results were more successful than even their protagonists had hoped. Economies grew, government debt ballooned and wages stagnated, but it could have been a lot worse.
The social cost and opposition to the inequality created by this economic tidal wave, however, has become a potent force for political change.
Mr Williams does not turn this analysis into a Pikettian polemic. His intention is not to propose political or social solutions, but to deal with the more prosaic implications for portfolio management.
As a fund manager, Mr Williams has to put his money where his mouth is and this adds a sense of grit and credibility. Other market commentators are just, well, commentators. The proof of the pudding of his analysis is measured every day in the white heat of the markets in his performance against the stock market and his peers.
While his analysis in the first half is compelling and well worth a read in its own right by anyone interested in understanding the recent ride of economic history, the second half is rather more geeky. This wave of government intervention has lifted stocks without discrimination and, with it, passive management has prospered.
In his analysis, the future of the bourse world will belong to good stock pickers. This is a view voiced daily by active managers. Readers will have their own views on his stock valuation criteria. However, there is an appealing element of the condensed Benjamin Graham or Terry Smith about his analysis. For students of stock selection, this should be commendation enough.
Published by Harriman House
Julian Ide is chief executive of Source UK