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outlook

After reaching extraordinary valuations, zeitgeist stocks are yet to return to reasonable levels

December 9, 2022

Ruffer investment director Duncan MacInnes delves into the truth and fiction of the bull market.

In the classic Christmas film Miracle on 34th Street, Kris Kringle is on trial for claiming to be the real Santa Claus. His defence lawyer says, “If this court finds that there is no Santa, I ask the court to judge which is worse: a lie that draws a smile or a truth that draws a tear.”

Doesn’t that feel like markets recently?

Private credit: Is now the time to invest?

November 28, 2022

Private market vehicles can generate premium returns over publicly traded markets with lower volatility in large part because they take away the investors’ ability to precisely time when the money comes in and out, says Keith Brakebill of Russell Investments.

Making the case for cash

November 4, 2022

Cash is trash. Cash is a melting ice cube. Going to cash is giving up... Ruffer investment director Duncan MacInnes says there's still life in the folding stuff yet!

Cash is trash. Cash is a melting ice cube. Going to cash is giving up.

Ruffer currently has the highest weighting to cash or cash-like assets in our history. We are concerned that liquidity is the new leverage and that a degradation of liquidity conditions poses an imminent danger to investor portfolios.

So why, unlike other investment managers, are we comfortable owning cash today?

Russell Investments’ 2022 Global Market Outlook – Q3 update: Fear of the known

June 30, 2022

Recession fears and central-bank tightening are driving market volatility. Equity markets are oversold and US core inflation has likely peaked. This should help markets stabilise and possibly recover over the second half of 2022, says Andrew Pease of Russell Investments.

Recession fears and central-bank tightening are driving market volatility. We think equity markets are oversold, and believe US core inflation has likely peaked. In our view, this should help markets stabilise and possibly recover over the second half of 2022.

The Bank of England’s inflation forecast looks like a triumph of hope over reality

June 10, 2022

Who’d be a central banker today? Once, they were the masters of the universe, bravely slaying the dragon of inflation and slashing interest rates to save the economy in times of peril. Today, they seem powerless to control inflation, says Ruffer LLP’s investment director Steve Russell.

Who’d be a central banker today? Once, they were the masters of the universe, bravely slaying the dragon of inflation and slashing interest rates to save the economy in times of peril.

Today, they seem powerless to control inflation. Fearful of raising interest rates too far, they issue hollow calls for wage restraint. No wonder Andrew Bailey, Governor of the Bank of England, admitted to MPs recently that “It’s a very, very difficult place for us to be in.”

Investors need to look beyond the conventional for real returns

May 20, 2022

Financial markets – with their twists and turns and unknowability – remind us just how hard it is to predict the future and just how wonderful perfect foresight would be, says Ruffer LLP’s Duncan MacInnes.

In the Back To The Future trilogy, the bad guy is a bully called Biff Tannen.

The megalomaniac mogul amassed his wealth because his older self travelled back in time to give his younger self the Grays Sports Almanac, a compilation of every sports result from 1950 to 2000. So Biff was able to earn a spectacular fortune from sports betting.

Financial markets – with their twists and turns and unknowability – remind us just how hard it is to predict the future and just how wonderful perfect foresight would be.

Taking back control? Demise of the deflation machine

May 5, 2022

Globally, inflation is likely to be higher and more volatile. Inflation risk, an absent adversary throughout the careers of most investors today, will need to be priced once again, says Ruffer LLP’s Jamie Dannhauser.

In the late 1970s, the world was on the cusp of radical change. The ‘Deflation Machine’ was being born. Deng Xiaoping, having outmanoeuvred Mao Zedong’s preferred successor, began the process of reforming China’s moribund economy. In the West, liberal, free-market ideals were gaining traction, ideals that underpinned the subsequent regime of rapid, disinflationary global growth.

Russell Investments’ 2022 Global Market Outlook – Q2 update: Dented, not derailed

April 4, 2022

The Russia-Ukraine war adds to near-term growth risks for the global economy and will likely keep inflation elevated for longer. While uncertainty is high, equity markets are oversold and should recover if tensions ease in the coming months says Russell Investments’ global head of investment strategy Andrew Pease.

Key market themes

Is higher and more volatile inflation here to stay?

March 17, 2022

Inflation is running hot, even before wage-price pressures have begun says Ruffer LLP economist Jamie Dannhauser.

Inflation is running hot, even before wage-price pressures have begun says Ruffer LLP economist Jamie Dannhauser.

Central bankers tell us the current burst of inflation will be transitory and workers will not mind the temporary squeeze on their living standards.

In today’s full employment economy, this is not convincing. The implied policy response is flawed, potentially even reckless.

Is investing for higher inflation a poisoned chalice?

March 3, 2022

Increasing inflation volatility represents the greatest challenge to investors for a generation. A new regime and the collapse of the financial market status quo requires us to reimagine portfolios. No longer can we rely on yesterday’s logic says Ruffer’s chief investment officer Henry Maxey.

“Inflation is the endgame. Just brace for inflation volatility first.”

This was the punchline of my 2021 Ruffer Review article.