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Matt Goodman looks at the investment industry’s reaction to Anthony Bolton’s claim that the bull market run is coming to an end

At the Securities and Investment Institute in London last week, Fidelity special situations fund manager Anthony Bolton said: “I have been more cautious in the last few weeks. I have looked much more at what people are doing. The bull market has lasted for three years plus. I was looking at clients and stocks and I thought this party has to end. The appetite for risk was worrying.”

In a defensive move that showS his pessimism about a swift stockmarket recovery, Bolton HAS slapped a 91m three-month put option on stocks in his special values investment trust.

Given the level of volatility in the markets over the last two weeks, Bolton’s gloomy prediction will concern the investment community.

But despite the recent wobbles, some experts are still bullish about the mid to long-term fundamentals of the market. There is a perception in some quarters that the US economy may start to weaken and drive a slowdown but Franklin US aggressive fund manager Robert Dean believes it may be too early to call time on the bull market.

He says: “The jury is out. It will take another three months to figure out whether the bull run is over. Market conditions are concerning but before I say it is over, I want to see more data that tells me that it is over.

“I want to see second-quarter GDP information and how commodities are doing before I say it is over. It is concerning how fast the correction is taking place but I think there are favourable backdrops such as inflation. I believe it is a mid-cycle correction.”

James Thorneley of Aberdeen Asset Managers does not believe the bull run has run its course. He says: “We do not believe that a totally indiscriminate bull run will continue where all asset classes go up together and we think that fund managers will have to be more selective.”

It is hard to predict the end of the bull run but Aberdeen is one of a number of fund firms happy to embrace volatility because it suits a bot-tom-up stockpicking style.

Thorneley says: “It has become more of a bottom-up approach to picking stocks and we see the present situation as a buying opportunity but we are being slightly more cautious about the stocks we are buying.”

One head of UK equities, who did not want to be named, says Bolton may have got it wrong. He says: “I still think the market is likely to rise for some time yet in the mid-term. Don’t forget that Bolton has a different agenda. It is in his interest to say that the run is over. He has a big put out there that is dependent on the market falling in the short term.”

Credit Suisse UK equity portfolio manager Phil True says : “Have any of the fundamentals changed to alter our view that the equity market should finish the year higher than today, and possibly back above 6,000? In short, no.”

Investec head of resources Daniel Sacks says he is adamant that, for gold at least, the bull run is not over. He says: “Gold has a bigger component of immediately price-sensitive supply and demand than other commodities but is this the end of the gold bull market? I think not. Gold prices are being driven up by fear of oil-induced inflation a weaker dollar and geopolitical turmoil. Despite the recent correction, none of these things has changed.”

Hargreaves Lansdown senior analyst Meera Patel says she is impressed by Bolton’s ability to make calls on the state of the market over a sustained period but believes it is too difficult to determine whether the bull run is ending.

She says: “Bolton is one of the few in the industry who normally seems to get it right but it is really hard to make a call on the markets. We have said for some time to our clients not to continue to expect the levels of returns they have been enjoying.

“We are advising them not to panic and telling them that it is not too late to take some profits. We expect to see a lot more volatility but see it as a buying opportunity. We still think the equity market looks attractive but people must realise that they are very unlikely to get the high teen returns. They need to be realistic and try to think in


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