Hugh Hendry, 'last bear standing', throws in the towel
Well-known for his bearish stance on stocks, Hugh Hendry has decided to change in his tune.
Hugh Hendry has been bearish for years. Rattled by the debt build-up before the global crash, the founder of Eclectica Asset Management cashed in on his scepticism as his contrarian strategy gave him a 30% return in 2008.
So this week's news that the self-styled "last bear standing" has thrown in the towel raised eyebrows. But he hasn't suddenly decided that everything is fine. "It will all end badly," he says of the current market rebound, because the fundamentals remain lousy.
But he is "tactically bullish" for now, because it's become increasingly clear that the world's central bankers will keep this party going for as long as possible. That gives equities plenty of scope for further gains.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"Stronger growth in one part of the world will be countered by even looser policy elsewhere." Overall, then, tighter policy will keep getting postponed.
This macro environment, along with the recent pattern displayed by US stocks, means that "markets look to us much as they did in 1928 or in 1998" a major spurt away from the top.
Japan could be especially promising, Hendry reckons, not because Abenomics will work, but because it won't. That would imply panic-stricken "money printing without limit". Hendry is betting on the Nikkei hitting 40,000 by April 2018.
-
Coventry Building Society bids £780m for Co-operative Bank - what could it mean for customers?
Coventry Building Society has put in an offer of £780 million to buy Co-operative Bank. When will the potential deal happen and what could it mean for customers?
By Vaishali Varu Published
-
Review: Three magnificent Beachcomber resorts in Mauritius
MoneyWeek Travel Ruth Emery explores the Indian Ocean island from Beachcomber resorts Shandrani, Trou aux Biches and Paradis
By Ruth Emery Published