July 10, 2025
As I prepared to launch Grenadilla Advisory LLC, I found myself within a rare window of time as an observer of global commerce and investing rather than as an active participant. Taking a step back from the grind of the work day allowed me take in the events from the last five years and come to a view of today’s investing landscape, which I believe will help to shape the investing mindset of Grenadilla. The world we have gotten to know for the last several decades is going through a tectonic shift. We are living through that transition today. And investing in this new norm will require critical thinking, imagination, and bold steps to find new sources of return.
In order to describe the fundamental changes that are reshaping our world, we have to dive into the human heart where “trust” resides. The globalized world that we came to know did not happen over night. It happened first among geopolitical allies – remember, after World War II and the fight against the spread of Communism in the Korean peninsula and in Vietnam, trust was only available to those who had fought on your side. As time marched on, walls came down, and in some cases, literally. I remember watching the Berlin Wall come down on TV, sitting on the floor of the living room as a relatively new immigrant to this country from South Korea. Fresh on my mind was the familiar discomfort that comes with living so close to the Korean demilitarized zone, the feeling that war could be imminent, and that spies may be everywhere. As I watched those Berliners destroy the wall, I knew that I was watching history in the making, and that something fundamental in the human spirit was shifting. Shortly after, The Soviet Union fell, and those of us in the West declared that democracy had won and that it was the end of history. Globalization sped up because there was a clear winner (the U.S. and its allies), and the basis of trust became commerce and deals. Continental Europe drastically made trade more efficient through a single currency. China joined the World Trade Organization in 2002. It seemed as if history had indeed ended, and the world was on its way to a paradise of globalized and frictionless commerce.
But here is the thing we all know about trust. It’s easily lost. Major cracks began to show after the 2008 Great Financial Crisis. How could a financial system we trusted so much, enough to plug in the global banking institutions great and small, crumble so spectacularly? Questions about the merits of the free market system arose, and a few years later with the rise of Xi Jinping in China, the second largest economy began its heavy-handed oversight. Complaints about globalization continued during the first Trump administration as the first round of tariffs were levied. Companies began to reroute their global supply chains in 2018 to avoid higher tariffs. When the COVID-19 pandemic hit the world and borders closed, trust among the globalized economies was tested yet again as we wondered “why are cotton swabs that we need for COVID testing made in northern Italy?”
We begin the second half of 2025 with lingering uncertainties about trust. We have tariff negotiations in full swing. China and the U.S. are at a crossroad: how do we untangle a co-dependent economic relationship when we have come out and said that we don’t trust each other? And underneath the headlines, companies are quietly examining their supply chains, casting fresh perspectives on risk, and forming new relationships around the globe. Going at this rate, what will the world look like, five years from now?
My thoughts for our investors and for a little canine movie star named Toto: we are not in Kansas anymore. This means that what has worked in the past for investors may not work the same way again. Correlations that we have become used to among asset classes may break down. I expect capital to move based on highly selective trust and based on geopolitical risk assessment, the latter of which has become more important than in the last several decades. Asset selection, asset allocation, portfolio construction, etc. may need a larger dose of qualitative assessment, perhaps more so than in the past as quantitative data from the previous decades may not reliably represent where we are headed. The asset management profession may be calling us for more creativity and human judgment in addition to the quantitative discipline in the midst of all the unknowns.
I am thrilled to be launching Grenadilla Advisory in the midst of much uncertainty. In my view, the uncertain environment makes investing challenging but immensely gratifying as we will be called upon to rise above the historical assumptions for investment selection, portfolio construction and risk management. It is always a privilege to be a steward of client capital and to have the attention of my fellow market watchers; my hope is to provide clear and streamlined guidance in a rapidly changing world. Thank you for reading. I am over the moon.