Ruffer

Investors have concluded “ABC” – Anything But China – but there’s a compelling case for this calculated risk, according to Ruffer’s Duncan MacInnes.

Markets are expensive, driven by powerful forces which want to turn a 40 year bull market into the first ever 50 year one. That trend is not one to embrace, and standing in its way could put investors in dire straits, writes Jonathan Ruffer.

The sharp fall in markets in August was a sign of things to come, according to Ruffer, but one that investors haven’t heeded, with positioning and sentiment becoming even more extreme.

An eventual market correction won’t necessarily be marked by its depth, writes Jonathan Ruffer, but by its speed. Caution may come at a price, but investors will have a different perspective on that price once it’s been paid in full.

A recovery in the UK’s equity market has almost always been predicated on valuation grounds, according to Ruffer. But this time the recovering domestic economy and a high exposure to commodities and financials might act as additional catalysts.

Artificial intelligence might be better at gathering and storing knowledge, but incorporating wisdom into an investment approach (or abandoning it altogether) remains the exclusive domain of humans – for now.

Ruffer expects a sudden reversal in the smooth conditions that investors have enjoyed. The ubiquity of multi-strategy hedge funds, algorithmic market making and 0DTE options might make it much worse.

The crippling doom loop between the banks and the real economy we saw in 2008 is unlikely to feature in the coming recession, says Ruffer’s Jamie Dannhauser, who is more concerned about a violent liquidation in financial markets.

It isn’t 2008 all over again, but dismissing the broader risks of SVB’s demise would be a mistake for investors, writes Ruffer CIO Henry Maxey.

As a forty-year long bull run fuelled by cheap money screams to a stop, markets are at an inflection point. This time really could be different.