Dylan Grice leaving SocGen

SORRY to see that Dylan Grice is deserting his strategist post at Societe Generale, where the team never fails to keep readers entertained. He is off to join an investment management firm as did his predecessor, James Montier, who is now at GMO.

His final piece, in typical style, invokes the cockroach, that consummate survivor, which follows the rule that a gust of wind indicates a potential predator and accordingly scurries off in a different direction. The cockroach has survived several mass extinctions, including the one that wiped out the dinosaurs. The calamities that affect investors occur when they herd into an asset class, as they did in equities in the late 1990s and as they are doing in government bonds today.

So Dylan prescribes a native diversification strategy for those who do not know what the future holds (which means all of us). A 50% bonds/50% equities split would have worked well over the last 20 years, but would have been disastrous in the stagflationary 1970s. So he suggests a four way split - 25% equities, 25% government bonds, 25% cash and 25% gold.