Man Group's Ed Cole: How to Adapt Your Portfolio to a Changing World

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Merryn Talks Money 44 min 8 speakers 5 chapters transcribed 2 months ago
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Alistair Lloyd 0:00
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Ed Cole 1:10
It's easier to recognize that the regime is changing than to understand what it will change into. But if you think about all those things I mentioned there, which is globalization, the frictionless movement of capital and labor and supply chains, I think those things are going into reverse. And as they go into reverse, it introduces more friction into the system. It requires national interests to be put at the top of the priority list for governments. I think we're all going to get used to the idea of America first by British, by Canadian. The Italians have got their own version of it. And these things are going to require more capital to be deployed at home. There's more demand on the physical constraints of the world, which gives rise to producer price inflation.
Ed Cole 1:59
All of these things are more friction, probably stickier inflation.
Merryn Somerset Webb 2:13
Welcome to Merrin Talks Money, the podcast in which people who know the markets explain the markets. I am Merrin Somset-Webb, and this week I'm speaking with Ed Cole. Ed is head of multi-strategy equities within solutions at Man Group and was last on the show back in April 2025. Then we spoke about the great rotation and why at the time Chinese stocks looked like pretty good investments. Well, Ed is back. And on today's show, we talk about, well, We talk about AI bubble or not bubble. Is it a valuation bubble? Is it an earnings bubble? Or is it really absolutely fine? We talk about Japan. We talk about small caps. We talk about the end of the 60-40 portfolio and how you should diversify from here. And we finish up with a really good sounding book for you to take to the beach.
Merryn Somerset Webb 3:01
Ed, welcome back to Marin Talks Money. Thank you very much for coming on again.
Ed Cole 3:04
Thanks for having me, Marin. Great pleasure to be here.
Merryn Somerset Webb 3:07
Last time we spoke, we talked at length about the end of American exceptionalism. We talked about how we expected other markets to outperform or at least to perform better than the US. And we talked at some length about Chinese equities and how they looked attractive and where investors should look at the moment. A lot has happened since then. We last spoke before the war in the Middle East, before the great AI bubble really got going. And I Two other little bits and bobs have happened since then. So why don't we start with an update? How are you feeling now about our previous conversation about American exceptionalism, about the Great Rotation out of the US?
Ed Cole 3:48
Well, I marked my own homework actually in advance of this. So it was a little more than a year ago that we spoke. And it's always a little galling to have to go back and listen to yourself as a starting point and then listen to yourself and recognize the extent to which you've probably got things wrong. I was a bit surprised that some of what I said has actually played out reasonably well. I think you and I were probably both on the same page that nothing's particularly exceptional other than hype cycles, and we're certainly in a hype cycle now.

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