View more on these topics

50-50 On US recession, says Bolton

Fidelity fund star Anthony Bolton says he is still bearish on the market and warns there is a 50/50 chance that the US will fall into recession.

Speaking at a Morningstar conference in London last week, the Fidelity special sits manager said the market has moved from “the greed to the fear stage” and it is impossible to know the extent of contagion from the US sub-prime crisis. He said: “We can only see the ripples and no one knows what is underneath, hence we cannot analyse it.”

Bolton said value opportunities are very scarce and he has taken some short positions using Ucits III powers. One sector where he is favourable is media from a contrarian perspective.

He warned that the credit crunch is a “real world” event and is not just limited to finance and could ultimately drive a recession in the US.

Bolton says that following a four-year bull market, he has taken a bearish view because opportunities are scarce while risk appetite has been high with people not paying enough attention to the spread between risky and less risky assets.

He says there have been big gains on a lot of cyclical assets, which is always a warning sign and also pointed to the commodities and infrastructure bubbles.

Bolton said the exceptional private equity deals have also been a cause of the current squeeze in the market.

He says: “If you looked at the sort of deals that these firms have been doing they have been extraordinary. One investment banker I spoke to said he had never experienced a market like this in 25 years.

“You also have structured credit, which, to me, has some of the similarities to the split-capital investment trusts by being based on models with assumptions which turned out to be poor.

“People have bought safe things which have turned out to be anything but safe and that is the biggest mind change the market can see and that will not go away quickly.”

Recommended

LibDems rule out cross-party challenge to means-test

The LibDems claim that means-testing could undermine pension personal accounts but say they are unlikely to align with the Tories on the issue.Speaking to Money Marketing at the LibDem conference in Brighton last week, Shadow Work and Pensions Secretary Danny Alexander said he feels as strongly as his predecessor David Laws that means-testing is the […]

Skandia best ideas steps up

Skandia Investment Management has taken its manager of managers best ideas range a step further with a fund that can make money in falling markets by shorting derivatives.

Under cover

Apathy and lack of knowledge makes the public buy poor products

Guide

Guide: 10 required letters — what to send, to whom and when?

This guide from Johnson Fleming will take you through the required communication and also give ideas for additional actions that will ensure your auto-enrolment project is a success. The topics in this guide include: the letters you need to send out; what to send and when; the importance of employee engagement; and what to consider as additional communication.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment