Active investors returning

As the tides are starting to turn to diversification

Delighted to see Stephen Roberts of Orgueil (pronounced Or-Guy ) Capital on CNBC talking about China consumer, European Financials and diversification away from $ centric assets. All very much music to our ears (!)

Stephen is a fantastic investor with a long track record of picking great stocks to back his thematic approach, aligned with a tremendous trading skillset to execute on his ideas.

Some investors may remember the very strong performance of the Horseman European Select fund that he ran in the 2003-2019 period and thus it was great to hear that both he and his long-term trader (and ex colleague of mine) Alex Bennett had decided to come out of retirement with a wider, Global, remit and a new long/short fund.

I took the opportunity to catch up with them both recently and am both pleased and impressed at how well their new fund is doing. Having been heavily into the Mag 7 last year, Orgueil were also starting to back China and thus saw a dramatic jump in September that has continued into 2025. China consumption is now their key theme, as Stephen discusses in the clip.

With returns of almost 50% last year and around 15% year to date, their leveraged long short book is making a strong case for a return to active management. As Stephen puts it, he wants to be the biggest bear in a bear market and the biggest bull in a bull market.

We share the sentiments, but are happy to be ‘merely’ long bull markets and out of, rather than short, bear markets, but it’s great to see someone who thinks like us back in the game and that he sees bull markets emerging in similar places to ourselves.

Stephen picks stocks, whereas we prefer to focus on thematic baskets, but the principles are the same. As we explained in our latest monthly, Rough Waters subsiding, we like a sailing analogy, where our long term trends are the ocean currents, our medium term risks the shift8ing liquidity tides and our short term uncertainties the fickle winds of trading.

When the trading winds conflict with the liquidity tides, things can suddenly get choppy, especially if the tides themselves are changing

When wind, tide and current all run together a passive, fully rigged, sailboat can perform extremely well. Fickle winds cause little threat, but if the tide and the wind conflict, then things can get rough and you need to get more active. If the tide has turned, then when the wind dies down you might find yourself stranded.

The fact that great active investors like Stephen are diversifying out of the US$ is both comforting and encouraging, while the fact that it is working so well for them suggests that the big diversification trend is only just beginning. It looks like they have rigged their sails for some very different conditions to most of the investment fleet.

We shall be watching closely!