Global Investing

Revisiting March lows

No, not in the way you think. Tuesday marked the one-year anniversary of world stocks hitting what appears to be their post-financial crisis low. The index was the MSCI all-country world index. The low was hit on March 9, 2009.

At the time, many investors reckoned their world was collapsing. Stocks had fallen close to 60 percent in a little more than 16 months. But the low proved to be the start of a remarkable rally that brought the index back up 80 percent until January this year.

All is not well on equity markets at the moment, given worries about European debt, the end of special central bank liquidity programmes and questions about the sustainability of the U.S. economic recovery.  The MSCI index seems to be having a hard time staying in positive territory this year.

And there are also investors such as Crispin Odey of hedge fund Odey Asset Management who have started worrying about whether the market will regress to its  lows. He recently told his clients in a note:

“Having hoped that March of last year might have proved to be the long term bottom for the developed markets, I am now much less sure.”

from Funds Hub:

Make hay while the sun shines

More good news for equity bulls from Crispin Odey.

No correction until the autumn?Odey, who called the possible start of the bull market earlier this year, says technically there is "every reason to be hopeful that a major correction will not happen before September".

And, having profited handsomely from his position in Barclays, which is now a 16.3 percent holding in his European fund, he sees the best opportunities in companies that were once unable to refinance but now can get credit, rather than safe-haven stocks.

"I still find myself coming out of meetings with companies whose share price is up fivefold since January and wanting to fill my boots. But it is quite a narrow field.

from Funds Hub:

No defence

Sheltering from the credit crisis in so-called defensive stocks could prove a disappointment to investors and a great opportunity for short-sellers, according to Liontrust hedge fund manager James Inglis-Jones.

rtr226iq2Inglis-Jones, who runs a hedge fund for Liontrust and who recently took on the First Income fund after the departure of star manager Jeremy Lang, has short positions in sectors such as tobacco and pharmaceuticals and has recently added more.

"It's an interesting opportunity when something is seen as safe," he told me. "When the company delivers a disappointment the payoff can be pretty good."