Image: Supplied Recent reflections from our Chief Investment Officer Siboniso Nxumalo offer a clear illustration of how this philosophy translates into practice.
Hard power raises the value of hard assets
Last quarter, he described the emerging environment as “hard money in a hard power world.” This year, this core thesis remains unchanged, but what has shifted is the speed and openness with which geopolitical power is now being exercised. For decades, the post-war global order operated under an implicit bargain: major powers would voluntarily constrain their actions in exchange for stability and legitimacy. In return, trade and capital could flow through relatively predictable channels.
That assumption is now being tested in full view.
The invasion of Ukraine by Vladimir Putin’s Russia was a stark reminder that borders can still be challenged by force. Then came the more recent eruption of conflict in the Middle East. 2026 has shown a second dynamic emerging: the very guarantor of the old system is displaying a more transactional and coercive posture. When the world’s largest economy openly contemplates territorial acquisition and attacks a sovereign without providing any evidence of a direct threat to its own country, the signal it sends is powerful. It reshapes the global “permission structure” – subtly encouraging other nations to act more assertively as well.
For investors, these developments are not merely geopolitical headlines. They represent a shift in the underlying architecture of risk.
The first shift is that “risk-free” assets are becoming contextual. For decades, sovereign instruments were treated as neutral anchors of stability. But in a world where currencies, payment systems, reserves and sanctions can all be weaponised, sovereign assets cannot be viewed as entirely separate from politics. Their safety increasingly depends on alignment within a shifting geopolitical landscape.
The second shift is the gradual replacement of efficiency with resilience. For years, global supply chains were optimised almost exclusively for cost and speed. Companies sourced from wherever production was cheapest. Today, durability matters more. Strategic redundancy, geographic diversification, and domestic capacity are moving up the priority list as businesses seek to protect themselves from geopolitical disruption.
The third shift is the renewed relevance of hard assets. Commodities and real assets possess a quality that is becoming more valuable in an uncertain world: they cannot be printed, frozen, or politically redefined. Assets such as Gold and critical commodities regain importance precisely because they exist outside the reach of financial engineering.
These insights reflect a deeper truth about investing: it is ultimately a study of history. The question is not whether history matters, but which history applies. Increasingly, today’s environment echoes patterns more familiar to the pre-1945 world than to the globalised era investors have grown accustomed to.
As Nxumalo observes, this is not a new world in historical terms. It is simply new to our memory. And because it feels unfamiliar, investors risk underestimating how profoundly it can reshape behaviour, capital flows, and asset pricing.
Underappreciated Quality and the search for quiet value
This is where the philosophy of Underappreciated Quality becomes particularly powerful.
By focusing on resilient businesses that are overlooked or mispriced due to short-term disruptions, the approach seeks opportunities that the market has yet to fully recognise. These are companies whose durability, adaptability and strategic positioning allow them to compound value through changing environments.
In a world where geopolitical realities are becoming more visible and markets are adjusting to new forms of risk, the most compelling opportunities may not be the ones everyone is watching. They are often the ones quietly building strength beneath the surface.
To champion the unseen, then, is not simply to look for hidden value. It is to recognise that the future rarely unfolds exactly as the recent past suggests. And for long-term investors, understanding that difference is where enduring opportunity begins. DM