About Sauvro

It’s March 2020 and my wife has just walked through the door with two black eyes.

What does that have to do with macroeconomics?

More than you would think. Bear with me.

Two Trillion Dollars and Two Black Eyes

I’m sitting at my desk at home when she arrives. I barely look up… Not because I am a bad husband - I am an excellent husband, as I am frequently reminded I need to be - but because I am staring at a number that does not seem real.

The Fed has just expanded its balance sheet by nearly 2 trillion dollars. It’s a blunt force trauma to the financial system - the kind of move that takes years in normal times, delivered over 3 weeks while most people were busy panic buying toilet paper.

Outside, the world is in freefall and markets are collapsing.

Every conversation, every call, every news segment running in the background is some variation of the same thing - doom and despair. Everyone is wondering how bad it gets.

But not me.

I have recently installed one of those fancy Japanese bidets with all the bells and whistles. My mind is free from the sheer panic of the big toilet paper short, and I am not thinking about how bad it gets.

I am thinking… we need to buy.

And I am also thinking… this is going to cost us later.

Not you and me specifically. Everyone. Because you do not expand a balance sheet like that without consequences - they arrive quietly at first and then all at once. The inflation that follows this kind of madman intervention is not a mere possibility; it is mathematically inevitable.

The only question is when it will happen.

But consequences are not always bad for everyone. At least not if you see them coming, and more importantly, know where to look and what to do with that information.

I start working through the sectors in my mind.

What benefits from this much liquidity entering the system at speed?

What does this level of intervention do to the yield curve over the next two to three years?

What does it mean for real rates, for capital allocation at scale?

Most people around me are asking when the bleeding stops.

I’m asking what to buy when it does.

The beehive feeling – as I like to call it – is in full effect. Ideas are swarming in from every direction, each thought buzzing into the next, full of purpose and slightly ungovernable.

I would love to sit with this longer – to organise this chaotic colony of thoughts into something more structured – but in any well-functioning hive, the queen’s arrival commands attention, and mine is no different.

I close my laptop, finally look up, and notice my wife.

Two perfectly symmetrical black eyes. Impressive really, in a deeply alarming way.

The Voluntary Catapult

Here is what you need to understand about her. She is, for some unfathomable reason, obsessed with horses. This is not a hobby. This is a lifestyle - she has mentioned this. A financial commitment that makes most leveraged investment vehicles look conservative.

The two black eyes, it emerges, are the result of being catapulted - her words, delivered while smiling - from one of said horses during what I can only describe as an unnecessarily voluntary activity.

My first question, naturally, is whether she’s alright.

Her first statement, before I can finish asking, is that it was absolutely not the horse’s fault.

Her second statement - approximately four seconds later – arrives with complete conviction. Despite standing there looking like Uncle Fester, she thinks getting an additional horse is a wonderful idea.

I look at her, then back to the number still glowing on my screen. Nearly two trillion dollars of balance sheet expansion… and a wife with two black eyes advocating for additional horses.

I understand in this moment, with complete clarity, that my financial analysis is not just a professional interest. It’s a discipline I have spent years sharpening, and as of approximately twelve seconds ago, a household necessity.

Luckily, I’m pretty good at it - I’ve had a lot of time to practice.

Cereal Soup and Other Expensive Lessons

I was fortunate to grow up around finance; it was the language spoken at home before I fully understood what it meant. Like any language learnt young, the foundations laid themselves and the fluency came later with time and experience.

By the time I understood - or at least thought I understood - what it meant, I was already hooked. Not really by the money itself – though that’s a nice perk of it - but by the idea that markets are essentially a giant, expensive argument about the future. The right information wins arguments, but only if you know how to think about it.

Knowing where to look is one thing. Knowing what you are looking at is another entirely.

This developed into something of an addiction for me. High school debate club is possibly to blame for that.

In all my teenage hubris I loved nothing more than to win a debate, and to a degree I still do. After all, my bank balance depends on being right.

Whether it’s arguing with a cocky teenager that cereal should be classified as a soup or debating with high flying rich guys about absurd dot-com valuations, it’s fun to be right.

But when you’re watching people lose everything they’ve worked hard for because they’re on the wrong side of an argument, sometimes blissfully unaware it even exists, it’s suddenly not fun at all.

2008 taught me that… and knocked the hubris right out of me.

I was living somewhere with a thriving expat community at the time. If you’ve ever lived in such a place, you know that in the absence of family, friendships develop fast.

Let me tell you about Bad Luck Bill. He was the first stranger I met in the city and later became a great friend.

We debated endlessly about everything, it was great. I’ve always believed a good opposing argument is worth more than ten that agree with you, it’s one of the most valuable things you can do for your thinking. It will either strengthen your conviction or exposes your weaknesses.

He did both quite regularly.

Most of his money was wrapped up in real estate… you can see where this is going. He had done exactly what he’d been taught to do: work hard, diversify within what you know, trust the fundamentals.

Ironically, we had debated about the stability of the housing market more than once. Mt stance was there was too much synthetic leverage in the system and risk was being mispriced in the lower-rated tranches of mortgage-backed securities, but he was not persuaded.

I was utterly convinced I was right - as I so often was utterly convinced - but I didn’t push on it. I was younger than him, less experienced, and I’m sure he was doing a fair amount of intellectual sparring with people far more brilliant than me.

He had a true rags-to-riches story, and I believe at least part of his resistance to my view was simply denial that it could be possible - the personal stakes were too high.

2008 settled that argument for both of us. The man I’d once debated from a position of considerably less experience was now sitting across from me with considerably less of everything else.

He had come from nothing and defied every odd to get to where he was in life – by any measure, he had won, and the hard part was supposed to be over.

But somehow, I was now the one covering his children’s last semester of school fees. I only mention this to illustrate how completely the table had turned - and the sad thing is, he was far from alone.

There was something almost Shakespearean about that time, empty shells of unfinished buildings lined the streets, perfectly reflecting the empty shells of the people moving beneath them. The city was playing out its own tragedy.

For the first time, being right felt so horribly wrong.

2008 taught me two things.

It sharpened my natural inclination to always look deeper - at what the data, not the headline, is actually saying. But perhaps more importantly, it taught me something about conviction.

I’d been right, but I hadn’t pushed when debating with Bad Luck Bill; partly out of deference – he was older, more experienced, and further along than me in every measurable way. I learned then that being right is worthless without the certainty to stand behind it.

It’s one thing to change your view because new data contradicts your thesis – I would say it’s imperative to do so. But it’s another thing entirely to be swayed by someone else’s conviction. Your information must be solid enough, and your interpretation of it clear enough, that opinion alone can’t shake you.

And markets will certainly try to shake you.

Receding Hairlines: Unexpectedly Bullish

The whole 2008 saga had left me with a simple question: where do you go to learn to see what is coming before it arrives?

The answer, it turned out, was sovereign capital.

The SWF years gave me a perspective I couldn’t have built anywhere else.

From the inside it’s surprisingly normal – the same office politics and useless coffee machine chit-chat as anywhere else. The only real difference is the numbers on the spreadsheets, which at first were quite frankly baffling.

I joined the fund relatively young, finding my footing by going deeper into the details than most people bothered to, and speaking up when I was certain about something. It ruffled a few feathers having the young gun speaking up, but I’d like to think it served me well in the long run.

If I had something to say, people knew I’d done the work to back it up – and when the numbers you’re dealing with are frequently larger than the GDP of some nations, you’d better be able to back it up if you’re going against the grain. It also helped that I already had a receding hairline by this point so most of my colleagues assumed I had a decade more experience than I actually did.

The misconception most people have about a sovereign fund is that it’s some secret vault of classified intelligence – and that’s really not the case for the most part.

The data is largely public, sitting there available for anyone to find. It’s their way of thinking about the data that is categorically unlike how a hedge fund, or most investors think.

They think in decades rather than quarters. They see relationships where others see balance sheets. They’ll step in and rescue banks, not for the return, but for the relationship. Once you understand why they make the decisions they do, and what it signals about where capital is moving, you gain an edge that can’t be found in a terminal.

You learn to see around corners and ask questions others haven’t thought to ask yet. You begin to understand what story the market has priced in – and more importantly, what it hasn’t caught up to yet.

Fewer Meetings, Better Coffee

Eventually, I left to invest independently. I learned an enormous amount through the fund and the connections it brought - but no one dreams of spending their life in an office. I wanted my time to be on my own terms, following the threads that interested me rather than the ones assigned to me.

My friends in the industry reach different conclusions to me regularly, but my theses – contrarian as they often are – have a habit of working out.

I discovered Substack as a reader, not a writer. I was using it to find subject matter experts about things outside my lane – the kind of specific expertise that rarely comes up in conventional research. I found some outstanding voices and learned from all of them – and continue to do so.

But when I went looking for what I know best - high-quality, forward-looking, actionable macro analysis - I found surprisingly little.

Part of the motivation is admittedly selfish. Public accountability demands a rigour that private conviction does not. It keeps me structured, accountable, and intellectually honest in a way I might not be if left entirely to my own devices.

It also gives me a good excuse to avoid being dragged to the stables for 5 hours a day.

Beyond the selfish motivations, I think back to Bad Luck Bill and the many versions of him I’ve seen over the years. Intelligent, capable people making serious decisions with serious capital, simply not asking the right questions of the right data.

That’s a solvable problem I can help with.

I have a specific way of seeing things that took a long time to develop. The market has had plenty of opportunities to tell me I’m wrong, but so far it has confirmed my approach more often than challenging it. Now I’m documenting those thought processes as I go through them. This, essentially, is Sauvro.

Rocket Emojis Need Not Apply

In practice, documenting those thought processes means a weekly briefing on the macro picture as I see it, pieced together through years of knowing where to look, how it all connects, and what it might mean for where capital moves next.

When I see a specific trade, I will say so. When I do not, I will say that too. I won’t manufacture conviction where it doesn’t exist just to try and keep you around.

This is not Wall Street Bets, there won’t be any rocket emojis around here.

Once a month, I’ll release a white paper - this is where I’ll go into more granular detail on a specific macro theme with considerably more depth than the weekly briefing allows. I’ll walk through the data I’m looking at and the reasoning behind how I’m reading it, so you get the full process, not just the conclusion. The goal is not to give you something to copy, it’s to give you a way of thinking you can apply yourself.

Every quarter I’ll step back from the detail to look at the macro landscape in its entirety… a view from altitude rather than ground level.

All of which raises the obvious question of who this is actually for.

Dress Code: Birthday Suit

Simply put, Sauvro is for anyone who wants a deeper understanding of what the macro picture is saying before the market prices it in.

Not repackaged Bloomberg headlines dressed up as insight, but a methodical way of piecing together what is hiding in plain view and connecting it into a single coherent picture. Shaped by years of proximity to capital large enough to move markets, the analysis tends to arrive somewhere actionable.

Pony Up Accordingly

As for my wife, she is fine - with two perfectly normal eyes. There is, as of the time of writing, an additional horse. I’ve been informed he is wonderful.

Apparently ‘we’ have put an offer in on an equestrian property. So there’s also that.

The horses and their expenses have, over time, become a fixture I’ve stopped questioning. Rather like their owner.

I’ve learned that the most important skill in both markets and marriage is knowing which battles are already decided before they begin and positioning yourself accordingly.

My wife has been remarkably consistent in her ability to find new ways to deploy capital; my job is to be equally consistent in generating it.

Luckily for me, I’m still that guy from debate club who can’t resist being right - only now the market is my opponent, and the returns on being right are rather more tangible than they were back then.

The research I share here is the same research behind my own investment decisions – it has funded my life for years, and Sauvro is simply where I document it going forward.

Glad you’re here.

One thing worth stating clearly: nothing published here constitutes financial advice. My risk tolerance, capital, and personal circumstances are my own – yours are different and I have no visibility of them. What I share here reflects my own thinking and my own decisions – please treat it as a perspective, not a prescription.