By Simon Falush

 

So you thought safe-haven pharmaceuticals and food producers were a safe place to shelter your assets?

 

rtx923rThink again, says Crispin Odey, the well-known hedge fund manager who thrives on a contrarian approach to equity investing. He tells Reuters that defensives could be the next target for short sellers.

 

"I certainly wouldn't own them and they look like they're becoming interesting shorts. It's an interesting bit of the market that people aren't looking at."

 

He says that the traditional flight to safety for equity investors into stocks like pharmaceuticals and food producers may end in more fingers being burnt. He points out that defensive companies have high price/earnings ratios meaning that there's plenty of scope for selling.

 

"What we have is the death of safety... (Defensives) look dangerous. You can either wait 17 years to get your money back or you can wait 2.6 years. What would you rather do?" Odey says.