Beware of the trend – it won't last forever

As investors, we all have an inbuilt tendency to extrapolate the past into the future, assuming cyclical trends will go on for ever. This is a big mistake, says Merryn Somerset Webb.

Back in July I wrote an article suggesting readers sell their luxury goods stocks.

It seemed straightforward: I could see no way that China's economy could continue to grow at 8-10% a year indefinitely (it makes no sense mathematically apart from anything else); I couldn't see how China could spend much more on stimulus than it already had; the property bubble was also looking increasingly likely to meet the usual nasty end; and if the massive money-go-round began to slow, surely the amount being spent on bling would at least stop rising.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.