Our views on Ukraine.

Here's an update on the situation in Ukraine for those who are interested.

This is a summary from our recent investment committee meeting. I hope you find some useful context here.

Last year, I predicted that Russia would invade Ukraine in early 2022. That kicked off this week, but doesn't appear to be going as well as Putin had hoped.

If Putin was expecting to walk into Ukraine like he did in Crimea, he was mistaken. Ukrainian forces are still losing ground, but are fighting with surprising effect against superior Russian numbers.

The talk from Western leaders has sounded very tough, but sanctions have proven weak. Far too weak a gesture to deter...well...anything. This too was, sadly, expected.

Sanctions won't work because energy is off the table, the oligarchs have plenty of ways to move their money around (including via crypto) and China will help with trade issues. Finally, nobody cares about Aeroflot.

With an accommodating West and a suprisingly effective opposition inside Ukraine, Putin may be in a position of having to go harder, or go home.

Going home would be ruinous for Putin

Given the above, plus Putin's various health issues, he's likely to be thinking as much about his legacy as anything else.

That likely means pushing harder.

Pushing harder may involve the use of tactical nuclear weapons, or other WMDs. That would be bad. WWIII bad.

Another emerging possibility is the removal of Putin by his own people if they're stuck between an embarrassing loss in Ukraine, or starting WWIII. Putin's removal seems to be the best outcome at this point.

Whatever the case, these events will hurt global growth. They will also feed inflation, which had likely otherwise peaked. That means a high probability of stagflation.

Prior to the Russian invasion, we decided to significantly increase our cash holdings and stay positioned for volatility. We're ready to shift that stance at short notice if the situation changes.  

We would ask you to join us in our support for the people of Ukraine. Many of them have just become refugees. Many more will follow. We wish them all a safe return to their homes and to the dignity and security to which all people are entitled.

We'll be sharing any useful resources we find across channels.