Big Politics was subjected to the stress which much of Big Business has been absorbing for some years – and it has buckled. Britons voted 52% to 48% to leave the European Union, the biggest political shock in modern times. The money markets have reacted sharply to the news, sterling’s value falling more than 8% against the US Dollar and the FTSE 100 index on the London stock Exchange also more than 8% below where it ended yesterday. This superb pre-vote think piece by asset allocator Charles Gave shows that although markets are struggling to absorb the result, there are clear long-term benefits. Gave is a 40 year money managing veteran and the co-founder of a $10bn asset management business sold into Alliance Capital in 1995. He left the company four years later to return to his first love – researching tactical asset allocation for Gavekal which he chairs. – Alec Hogg .
By Charles Gave*
The UK political class is all in a flutter as the latest European Union referendum polls show an apparent rising tide of support for “Leave”. Having orchestrated the great and good into warning of catastrophe should a Brexit materialize, it would seem that “project fear” is not cutting through. I tend to have strong political convictions and perhaps for this reason I have a lousy record of guesstimating election outcomes. Since the UK referendum debate started, I always felt that the Brits would vote to leave, so no one would be more surprised if I was for once proven right.