Money managers under the microscope
Odey backs the bull case
Plenty of fund managers have been predicting a rally in stock markets after the sharp drops seen last year and early this year, but most have expected it to be no more than a bear market rally.
However Crispin Odey, one of the UK’s best known hedge fund managers with a pay packet to match, has stuck his head above the parapet and said he thinks the recent rebound in stock markets could be the start of the next bull market.
Odey has already profited from the market rebound through the Barclays shares he bought around the start of the year (having made money shorting banks last year). Despite a wobble early last month, the shares were his fund’s best bet in March.
Having begun in the banking sector — where Odey’s optimism rests on rising net interest margins rather than falling bad debts — and base materials sector, the rally could spread to other industries where capacity has shrunk enough to improve companies’ pricing power, he says.
After the precipitous share price falls seen in the banking sector last year, investors are understandably nervous about buying into banks, just in case share prices resume their downward course again.
For them, Odey signs off his note to clients with a warning: “It does look like a bull market that many investors may fail to enjoy.”