A new war has begun. We are seeing signs of a new world order where political leaders may be captured or killed. This sets a worrying precedent for future events. No one appears completely safe anymore.
Before commenting on the war in the Middle East, we want to address events in Mexico, which have recently received less attention. The deaths linked to the unrest are tragic. It hit us extra close that one of our holdings, Vizsla Silver, was affected.
Vizsla holds strong assets, but they are located in regions where drug cartels are active. In the past, the cartels were relatively united and focused mainly on drug trafficking, which is far more profitable for them than other activities. Recently, however, the cartels have split into smaller rival groups. This has created internal conflict and competition.
Some weaker groups have tried to raise money for weapons through kidnapping and extortion. Vizsla was affected by such an incident. When the impossible demands could not be met, the hostages were murdered. Mexico deployed more than 10,000 soldiers and special units to find those responsible.
Another powerful cartel leader has since died as Mexico, with some support from the United States, tries to restore control. This has led to more unrest and fragmentation, which may cause further incidents in the near term. In the longer run, however, we see it as positive that these issues are coming to light and that cartels may no longer operate as freely as before.
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The theme of this month’s letter is “Grand Corruption.” This term refers to corruption at the highest levels of society, where people in power often feel untouchable. Even though it receives surprisingly little coverage in major media, we are now seeing a period where many such figures are falling from grace.
Corruption in arms deals has existed for decades. One well-known example is the Bofors scandal in India. It is also troubling when companies such as Ericsson contribute millions to Donald Trump’s inauguration ceremony, while ordinary people risk legal consequences for accepting even small gifts.
There are also other ways to influence decision-makers besides direct bribes. Some people arrange ultra-luxury events and may even offer sex, drugs, or other compromising situations to gather damaging information. This material can later be used as blackmail to influence political decisions.
The Epstein scandal is a clear example. Several powerful politicians and major business figures have been linked to deeply questionable behavior. How long can such individuals remain in positions of leadership, especially when they are meant to serve as role models?
There are many perspectives and narratives about the situation between Iran, the United States, and Israel, and we cannot cover them all here. From our point of view, Iran was not a direct threat to the United States. Instead, it appears that U.S. actions may reflect Israel’s desire to dominate the region. The Epstein scandal may also connect to this broader picture. Some believe intelligence services created the entire Epstein network to gain leverage over Western leaders. That leverage could then be used to influence political decisions. Grand Corruption.
We support the idea of a transparent world and therefore support Transparency International’s efforts to expose corruption and highlight its harmful effects on society. You can read more about their work here.
Alongside the tragedy of war and loss of life, we also note that conflicts create huge financial costs that must be financed (usually through higher debt). At the same time, large amounts of military equipment are consumed and must be replaced, which increases demand for metals. These are not developments we wish for to strengthen an investment case, but they are, unfortunately, a part of reality.
Now to something more positive. The number of investors in our funds continues to grow, and we are now more than 120,000 investors on this shared journey. AuAg Silver Bullet has become the 20th most widely held actively managed fund on Avanza, excluding Avanza’s own funds. It is worth noting that many of these funds have existed for 26 years, while ours have been around for only six.
Growth across the Nordics is another encouraging sign. Interest in Norway has been so strong that the major newspaper Nettavisen traveled to Gothenburg to write a feature about AuAg.
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