EDITOR'S LETTERMerryn Somerset Webb
Our lady’s not for turning
MoneyWeek is well-known for its ‘trades of the decade’. In 2000, Bill Bonner made a pretty simple one. Sell equities, buy gold. It was brilliant, and made a good few people pleasantly rich.
In 2010, Bill came up with ‘sell bonds, buy Japan’ for the simple reason that the latter was cheap and the former expensive. We liked that, but wanted something even simpler. So we chucked in another – ‘sell emerging markets, buy developed markets’.
At the time, we reckoned that developed markets looked significantly cheaper than emerging ones.
The market had recognised all the problems in the US and Europe (hence the prices), but was still allowing itself to believe that all was well in fast-growing Asia. We disagreed. We feared a new financial crisis in China, we worried about currency wars, about growth across Asia, about the general treatment of shareholders in some of the markets in question, and about price. That’s worked out pretty well in the last three years.
• Read the full editor’s letter here: Our lady’s not for turning.