Hello, everyone today we’re back for another episode of The Asia Report where I will be talking about the Capital Cycle. “Capital cycle” was coined by a very successful asset management firm called Marathon Asset Management, they’re based in the UK, they’ve been around for about three decades now. They’ve been implementing this framework for quite a while, and essentially what a capital cycle is, is that it simply dictates that capital is attracted to places where investors think that there’s a prospect of high return and it is repelled or leaves when investors think that there’s no returns to be made, and this inflow and outflow of capital is what also generates mean reversion ultimately in the end.

Let me just break that down a little bit. It’s a very simple idea but it’s extremely important to understand.

Investors have probably heard of this term called mean reversion again …