The tech bonanza up to 2022 is well behind us as war in Europe, interest rates in the US and geopolitical tensions around oil, sovereignty, climate all coalesce to make the investment mood uglier.
While tech share price valuation multiples have not reverted yet to their mean, significant reorientation of capital and people is very apparent. Meta's misteps with the metaverse, microsoft's investment in ChatGBT and Tesla's aspiration to build a $30,000 electrical vehicle are creating wildly dissonant swings in investor appetite. The partybowl of cheap money and sky high aspirations may not have been put fully away, but the party is no longer in full swing.
As the FED grapples with embedded inflation in a hot economy and China resurfaces from a self-imposed Covid slumber, there is no reason to believe we are quickly returning to the wild carousel of the past decade. More likely, is that we are headed towards the slower and more pragmatic aspirations of capital to be protected and earn a return ahead of inflation each year. As inflation has surged, capital's depreciation is all too evident. But there is still firepower in private equity and investment funds, though their generosity levels and optimism are more tempered.
Putin's war in Ukraine, China's ambitions for Taiwan and the US awakening to consider how to tame a surging military buildup in China, whilst not diminishing US company operations there, especially Apple, is looking more like Churchill's reflection on Russia, a riddle wrapped in a mystery inside an enigma. The march of NATO east, whilst pleasing for libertarians in Europe and the US, holds no such appeal for former communist leaders, whether Russian or Chinese, or more radical elements with Islamic ideologies, who regard western ideals and practice as something they can do without.
India and China especially have been playing chess to Europe and America's checkers when it comes to Russia. Whilst the west trades sanctions with Russia, India and China trade oil. China is happy to let Russia weaken itself, whilst in turn weakening the US resolve and arnament supplies, in supporting Ukraine. Europe with the UK isolated due to Brexit, is even weaker and frailer than one can imagine in tolerating Russia's unprovoked land grab.
The sad reality is once the US elections come around, a reemerging President Trump will further divide US committment to Ukraine...all must be pleasing music to President Xi, who understands when your competitors are losing, you are likely winning.
So, its fast forward to the past - the cold war is well remembered and it looks like whilst the energy shock to Europe is abating somewhat, the mercury is falling further.
We who are outside of the present pangs of the world are indeed the lucky lucky few.
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