It’s rarer these days and in the age of the internet harder but nevertheless reading a good book is worth its weight in gold and a combination of a bank holiday and time in airports in the last fortnight meant I’ve had a chance to read three.

As well as rereading Hemingway’s Spanish civil war epic “For whom the bell tolls” and Le Carre’s classic espionage tale set in Berlin in the 1960’s “The spy who came in from the cold” I’ve also surprisingly been struck by how much in his account of Greece’s dealings with the European Union  “And the Weak Suffer What They Must”  Yannis Varoufakis’s arguments resonate.

In 200 pages the former Greek finance minister spells out why from a left wing perspective the EU is failing so spectacularly as a project and its architects and representatives so out of touch with the average Joe.

This is important as we go into the w/e and France is on the verge of electing an insipid sounding 39 year old former banker who ran off with his teacher at the age of 15 and who looks like a cross between Justin Trudeau and Tony Blair with vaporware views to match.

The fact that this is seen as a victory for the “European project” whatever that is, shows only the depth of the failure of the European elites to carry the people with them.

In addition the UK leaving the union is a big blow.

I was in Dublin yesterday for a board meeting of the PAM Irish fund structure and it was instructive how the Irish are seeing it.  Irish Taoiseach Enda Kenny is trumpeting free trade with liberal partners in the form of Denmark and Holland to try and counter the weight of the French and the Germans as the Brits prepare to depart.

This side of the channel Theresa is doing her Maggie impression of ‘No, no, no ” but in fact Jean Claude and Angele cosying up and coming up with an arbitrary bill of €100bn on the “think of a number and treble it” school of European Commission maths only goes to show how tough the bargaining’s going to be.

European markets have though had a better tone to them this year. They had become oversold at the start of the year and have rallied nicely.

M&A remains at an elevated level.

Chinese diversified conglomerate HNA has followed up its purchase of 25% of OLD MUTUAL’S US asset management business by becoming DEUTSCHE BANK ‘S  largest shareholder in a move to 9.9% this week.

The deal is an interesting one on many levels.

The Chinese move highlights relative value in Europe (on the basis that most assets relative to the S&P 500 are bargains) and we’ve been overweight in the international multi asset funds in continental assets with a 20% weight in a range of European utilities (yielding 5%), European property (yields of 6% and big discounts to NAV) and corporate loans, the debt of continental issuers like CROMOLOGY, EIRCOM and VERALLIA all blue chips with BB credit ratings and 5.5% yields looking value still.

Here in the UK real estate too starts to look better after poor performance the last 12 months and we’re taking a hard look having been out of the sector for a long time. BRITISH LAND, GREAT PORTLAND ESTATES and LAND SECS have all corrected sharply and our only holding had been STARWOOD REIT which makes mezzanine loans to the likes of Claridge’s and Holiday Inn and is more defensive.

Our other key source of alpha in Q1 has been chemicals where the Chinese have also been active. CHEMCHINA’s deal to buy SYNGENTA has gone through regulators now and PPG is after AKZO while DOW /DUPONT and BAYER/MONSANTO complete the deck of four emerging global chemical powerhouses.

Where we’ve really benefited is from the supply chain as producer pricing power strengthens with ilmenite and titanium dioxide(7% paint ingredient) and the likes of cobalt for batteries (that man Musk again building his gigafactory in Nevada…) vie with our overweights in European defence stocks like FINMECCANICA to add alpha.

Overall our performance in the funds year to date has been extremely solid with our average mixed asset fund returning +8% in US$ and the gold fund number one of all UK funds in the UK IMA returning 25% in Q1.

This has been a great effort by the team with Amanda and the two Richards doing a super job in a highly challenging market environment.

And with commodities having given up the entire Trump election gain, Obamacare reform dead in the water (the diluted GOP face saving effort passed by the House last night doesn’t count) and bond yields dropping again as China slows and the US, UK and Japan show little sign of the much vaunted growth acceleration we reiterate our overall caution on equity markets.

We don’t buy the  “equities are the only game in town” argument-a cyclically adjusted p/e ratio of 21× earnings in the States is expensive and euphoria about a good Brexit deal,  China reform, Macron and Trump is overdone in our view.

We believe the absolute priority for any investor is and will be for the foreseeable future to protect themselves against inflation and the threat of eroding purchasing power as governments continue to print  money in large quantities.

We continue to run a diversified portfolio with quality blue chip corporates in the BB to A- category picking up those 5% to 6% yields, EM income where we can (just about) get 5% on stuff like PEMEX and PERTAMINA, gold and precious metals,  and single equity positions like BLUEJAY +MDL (ilmenite) AUSTRALIA MINES (cobalt), FINMECCANICA (Italian defence and aerospace) and BALFOUR BEATTY (UK and US infrastructure).