- Fund manager Neil Woodford has warned stock markets around the world are in a “bubble,” citing bitcoin, ETFs, and yields on European junk bonds as “red lights.”
- Woodford made his name as a money manager by avoiding bank shares before the 2007 financial crash and by avoiding the tech sector before the tech sector’s dotcom crash in 2001.
LONDON – Star British fund manager has warned stock markets around the world are in a “bubble” which could result in one of the worst market crashes in history.
Speaking to the Financial Times, Woodford said: “Whether it’s bitcoin going through $US10,000, European junk bonds yielding less than US Treasuries, historic low levels of volatility or triple-leveraged exchange traded funds attracting gigantic inflows – there are so many lights flashing red that I am losing count.”
He said current equity valuations represent a bubble the likes of which he had “only witnessed two or three times in my career as an investor.”
Woodford is the founder of Woodford Investment Management, which manages over £15 billion of assets. He said he was selling out of over-hyped “zeitgeist” stocks and instead buying up UK-focused housebuilders and banks whose share prices have been discounted by the Brexit vote.
Woodford made his name as a money manager by avoiding bank shares before the 2007 financial crash and by avoiding the tech sector before the tech sector’s dotcom crash in 2001.
His flagship £8 billion equity income fund has performed badly this year, but he insisted his strategy will bear fruit.
“In the dotcom bubble it was the old economy stocks which became profoundly unloved and undervalued and today in the UK stock market, it is domestically-focused stocks,” he told the FT. “The funds I manage are positioned to exploit this opportunity and I am utterly convinced it will pay off when the bubble bursts – which I believe it inevitably will.”
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