James Aitken: It Pays To Shave With Occam's Razor

Danny Moses (0:01)

Welcome to the On The Tape Podcast. I'm your host Danny Moses, and today I welcome back a dear friend that I would say one of the top financial plumbers in the world, James Aitken to the pod. You can call James a macro strategist, but he's much more than that. His publication Notes From a Small Island is more than just James' thoughts on global financial markets and products. It's a culmination of James' experience as a trader and insights from the contacts and friends he has met along the way.

You know you have contributed something to the investment world when James recognizes you in one of his Notes with his trademark hat tip. James was last on in March 2025 Having gone back and listened to our conversation, many of the challenges the markets faced then are still being dealt with today, and in some cases, becoming more pressing. In addition to the challenges the broader markets are facing today, James shares his thoughts on both US fiscal and monetary policies, including thoughts on Scott Bessent and Kevin Warsh, how investor psychology and behavior are more important than ever to understand when assessing the markets. We discuss if we are seeing the emergence of a sovereign bond crisis as yields continue to move higher across the globe. We hit the AI trade and where James is telling his clients to look for opportunities, James shares how he thinks his friend, Canada's Prime Minister Mark Carney, is handling the challenges he is facing. We can do all of that and a lot more. So please enjoy my conversation with James Aitken.

James, welcome back to On The Tape. We have so much to get to, but before we do, for those that don't know you, maybe a quick background on yourself, Aitken Advisors and when you began writing Notes From a Small Island.

James Aitken (1:34)

Good to be with you, Danny, as always, and thank you for making time with me to have a chat about the world. Look, I started writing Notes From a Small Island about 30 years ago when I was in Sydney, or a version of it, and then moved to London 27 years ago. I was writing it on a sell side, various sell side trading desks, and then when I went off under my own steam in 2009, I kept the name Notes From a Small Island because I'm writing from a small island, which happens to be the United Kingdom. Well, the essence of the United Kingdom. So that's how it all got kicked off and shamelessly borrowed from the great Bill Bryson, of course.

In terms of what I do, well, I try to help people stay out of trouble. I work for myself. I work with extraordinary people all around the world. I'm very fortunate to have worked with many of the world's most sophisticated if invisible investors. Invisibility seems to go hand in hand with success for a lot of the world's best investors, which is just the way they like it, because they can change the mind wherever they like.

It's just me, my business. I work with every type of institutional investor and high net worth individuals. And as I said, Danny, I'm just trying to stay out of trouble and help my clients ignore all the nonsense, stay on the path, be patient, and then take advantage of dislocations and misunderstandings when they arise.

Danny Moses (2:50)

I would just add, you're a great person and a great friend on top of all that. And that's a real rarity on Wall Street when you can combine all of those facets. So I mentioned in the introduction that investors and consumers are facing many challenges that seem to be mounting. You were on here in kind of mid-March 2025, weeks before the reciprocal tariffs that we were hopeful wouldn't happen, but they did. Doge was just getting going. We knew it would do nothing. It did less than nothing. As we were going into kind of the Trump 2 policies. US debt was $37 trillion. Here we are, you know, over $3 trillion later. A couple global wars, higher energy prices, higher inflation, coupled with kind of a market and economy dependent on a handful of stocks and high-end spenders.

I'll make it easy question to start, James. What advice do you give to your clients in terms of where they should be allocating their capital that provide an appropriate kind of risk-return profile? I know you can't answer that in a 45-minute or an hour-long podcast, but just give me your general kind of holding the wheel here, where we're going.

James Aitken (3:52)

Brace yourself, because what I've been doing very gently, depending on the client's mandate over the past month, what am I recommending they allocate to on a risk-reward basis? Bonds?