The Guru Speaks !
Fidelity fund guru Anthony Bolton believes the new year will usher in a fresh bull market for investors. Although he sees recent times as the worst financial crisis he has seen in his 30 years in fund management, all the indicators like cheap valuations show that the bottom is there. He says that a bull market is likely in the first quarter of 2009 followed by a period of consolidation.
Bolton, who ran Fidelity's flagship special situations fund from 1979 to 2007 has also called the bottom of the hugely troubled commercial property market. He says: "Prime property is yielding 7.5 per cent at a time when there is a shortage of yield elsewhere. There are risks, but long leases protect you in the short term - unless the tenant goes bust (spotted the flaw there Anthony). Some will go under but even if you lose 5 or even 10 per cent of your income, that's still 90 per cent that's protected for the next 10 years.
As for next year's rally Bolton tips financial stocks and consumer cyclicals to lead the bounce. He also believes owning a basket of banks is the best option."In 28 years I have nearly always been underweight in banks. They are opaque and impossible to analyse so I have generally been against them. However, sentiment has become extreme and governments have strengthened their balance sheets. One or two may have to raise additional capital, but that is why you should own a basket."
The bold Mr Bolton has outlasted and outperformed a great many "star" fund managers over many years (27 years managing the same fund must be some sort of record) by getting these strategic calls right much more often than most. Light at the end of the tunnel for investors ?
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