*'It’s a good time to buy risk assets, equity and bonds'* <http://www.financialexpress.com/news/Its-a-good-time-to-buy-risk-assets-equity-and-bonds/447823/#> Posted online: Apr 17, 2009 at 2348 hrs
**Investments at Fidelity International president *Anthony Bolton*, a thirty-year veteran in the investing world and considered by many to be “Britain’s Buffet”, spoke with *Ahhay Rao *of FE about the global markets outlook, investing strategies and his contrarian approach to investing as seen in his new book Investing against the tide. Excerpts: •*Globally, investors seem to have a ‘play it safe’ approach while you propose a contrary view. What exactly are you proposing investors to do? * I think it’s a good time to buy risky assets, equity, bonds, even some property. These are areas which have essentially done very poorly over the last 12-18 months. I think it’s a less good time to keep your money in cash or government bonds which are very safe areas and have done well. But I think, they will do less well relatively in the future. •*What kind of companies does one look for equities? After the slum, will newer leaders emerge or one would stick to the known bluechip firms? * I think there is a range of opportunities available. Sectors that led the bull market earlier may not necessarily be the ones leading it in future. The areas that I particularly like at a global level are consumer cyclical shares which include sectors like retail, technology, finance and value stocks as a group. In terms of big and small companies, I think there are some excellent opportunities in smaller companies. However, I would not buy stocks for companies that are financially weak. This is a time to have companies which have strong finances. •*So you propose an balance sheet approach * Yes, I have always been very interested in balance sheets. My biggest mistakes have been companies with weak balance sheets. I think, at the moment, a strong balance sheet and financials are particularly important. •*Having been an investor for so many years now and having witnessed so many cycles, what have you learnt during this financial meltdown? * I have learnt a lot during this crisis. What I’ve seen is that a many things and events are completely unprecedented. Regulations need to be improved. Especially for the banking sector. Changes always happen after the events have occurred. We probably may not see a financial crisis for another 30 to 40 years. Lesson cam also be learnt from scandals like Maddoff. The prime lesson that I learnt is investments are not easy. One needs to do a lot of research or have got to use people whom one can trust. Just looking at the returns without understanding how they are coming is a mistake. One surely needs to understand the process. •*Do you think there would be more transparency in the financial products and investments? * Yes. Many changes would be made to improve transparency. In cases like mark-to-market accounting, things have gone too far the other way and this, I feel, would surely be reversed in the coming few months. •*How do you feel things change at a global level as far as economic conditions are concerned? Which countries are being looked at as investment destinations currently? * As far as coming out of this downturn, rebuilding the markets and economies go, the recovery process would be slow. As far as investments at a global level are concerned, I feel America would be one of the preferred destinations. That is where the crisis originated from and, I feel, it would be one of the fastest to recover. It has been most proactive and is showing signs of recovery. •*Many sovereign wealth funds invested into American firms in the initial stages to bail out the firms. Given the fact the most of them now owe SWFs a huge amount already, do you feel more money would be pumped into the big American companies? * Yes. I don’t think that if these countries have shares of these firms, it will deter them from buying further into the company or pick up more shares . --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
