Every year events prove that forecasting is futile and 2020 was no exception, says Bill Miller, chairman and chief investment officer of Miller Value Partners, in his latest quarterly letter to investors. It’s far better to understand what is going on today than to make guesses about the future, says Miller, who made his name at Legg Mason when his fund beat the S&P 500 for 15 years in a row from 1991 to 2005.
Today “we are in a bull market in stocks that began in March 2009 and that shows no sign of ending”. Valuations are high, but “not as high as they look”, given a supportive Federal Reserve and a strong recovery from coronavirus. Markets may even be underestimating the rebound’s likely strength. If growth beats hopes, the “rotation to value” should continue, which would be good news for “some groups that have trailed the market for years, such as banks and energy”. Added to that, inflation is likely to rise more sharply than expected “as the economy becomes more ‘normal’ in the second half”. Commodities and precious metals have already enjoyed significant gains, which should “continue in 2021”.
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
-
How high earners could boost their pension by thousands and cut childcare costsSalary sacrifice could boost your pension by thousands, while also helping you save on childcare costs. We delve into the numbers.
-
Monzo launches 11 ETFs via Blackrock to help savers investMonzo customers can now invest BlackRock's iShares ETF range via its banking app, making investing more accessible to millions
-
How Warren Buffett built his fortuneAnalysis Warren Buffett is considered by many to be the best investor of all time. We examine how much Buffett is worth and how he made his fortune.
-
The US is in one of the greatest bubbles in financial historyCover Story Jeremy Grantham, who has a history of getting big calls right, fears slumps in several wildly overpriced markets (including UK property). He tells Merryn Somerset Webb what investors should do now
-
Bill Ackman: beware of short-term market volatilityOpinion Bill Ackman, founder of the Pershing Square hedge fund, is upbeat on prospects for markets in 2021, but is worried about short-term volatility as coronavirus takes its toll.
-
Mark Mobius: Lockdowns are a losing game
Opinion An easing up of lockdown efforts is likely to mean ”economic recovery at the end of this year and the beginning of next year”, says Mark Mobius, co-founder of Mobius Capital Partners.
-
Will Danoff: buy firms that are doing well right now
Opinion Forget future earnings, says Will Danoff, portfolio manager at Fidelity. What matters is now.
-
Anatole Kaletsky: I was wrong to be bearish on stocks
Opinion There are “three clear reasons” for equity markets to keep climbing, says Anatole Kaletsky, chief economist at Gavekal.
-
James Montier: valuations are way too high
Opinion The market is completely discounting the risk to the economy and operating as if there is nothing to worry about, pricing in a V-shaped recovery, says James Montier, investment strategist at GMO.
-
Abby Joseph: US markets have no margin for errorOpinion Much of the markets' recent strength is down to the US Federal Reserve using monetary policy to backstop the equity market, says Abby Joseph Cohen, senior investment strategist at Goldman Sachs.
