Anthony Bolton: Investing In 2010

Anthony Bolton: This Is Not Bear Market Rally - It's The Start Of A Bull Market!

Monday, October 06, 2008: Anthony Bolton : Why Now's The Time To Buy!

• When he warned in November, 2006, that the bull market was long in the tooth and share prices seemed unsustainable, the FTSE 100 traded at around 6,000. It went on to top 6,600 before beginning the long decline to where we are today.
  
  More importantly, for an army of investors who follow the "British Buffett", Mr Bolton added that he has been buying shares for the first time in two years because some valuations are the cheapest he has seen in a lifetime.
  
  Speaking at his offices in the shadow of St Paul's Cathedral – where, incidentally, this multi-faceted man has had his choral compositions performed – he said: "Investors who sell now are making the great mistake of being shaken out when markets are low.
  
  "They are probably the same people who bought when markets were high. If you are panicky by nature, you should not have invested in shares in the first place.

Sunday, April 12, 2009: 'We've hit the bottom' says Anthony Bolton

• Bears remain convinced the rally was little more than a "dead cat bounce" or bear market rally.
  
  But Mr Bolton remains unfazed. His beliefs were underlined by a survey from his firm that found investing when consumer confidence is at a low point, such as now, can generate an average of 13pc more in annualised returns.
  
  He did, however, concede that conditions would remain bumpy for the next few months. "The market recovery won't necessarily be in a straight line and we'll still see some ups and downs, the pattern we have seen recently."

Thursday, April 30, 2009: All Things in Place’ for Bull Market

• April 30 (Bloomberg) -- Anthony Bolton, president of investments at Fidelity International, said a bull market in equities has already begun and financial shares are poised to drive recent gains higher.
  
  Low valuations indicate advances that began in March are the start of a bull market, Bolton said. He favors financials, consumer cyclical, technology, and “value stocks,” such as retailers, automakers and construction-related shares.
  
  “All the things are in place for the bear market to have ended,” Bolton said in an interview with Bloomberg Television in Hong Kong. “When there’s a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I’d like to bet against that.”
  
  The MSCI World Index has dropped 3.2 percent this year, extending last year’s 42 percent slump, the worst annual performance since at least 1970. Shares plunged as a collapse in U.S. consumer spending and a freeze in credit markets sent the U.S., Europe and Japan into their first simultaneous recessions since World War II.
  
  The declines dragged the gauge’s price-to-book value, or the ratio of stock prices to company assets, to 1.5, down from 2.4 at the beginning of 2008.
  
  Bolton, who is based in London, said that in September he started putting money into Fidelity’s China-focused fund, which invests in Hong Kong-listed H shares of Chinese mainland companies, and into Japanese stocks.
  
  Not Bear Rally
  
  Investments in money market funds in the U.S. have reached a record and could fuel a bull market during the next two to three years, he said.
  
  Bolton’s view contradicts that of Nouriel Roubini, the New York University professor who predicted the financial crisis. Roubini said last week he was “still bearish” and that an economic recovery is going to take “longer than expected.”
  
  “Nearly all the broker research I read says ‘bear-market rally,’ that’s one of the other things that makes me think it’s the beginning of a bull market, not a bear-market rally,” Bolton said. “When everyone is extremely negative, I want to bet against that. If you wait for things to get better, you’ll miss the rally.”
  
  Fidelity International managed about $157 billion as of January, according to Hong Kong-based spokeswoman Megan Aitken.

'We've hit the bottom' says Anthony Bolton

'We've hit the bottom' says Anthony Bolton

• Anthony Bolton, the veteran stock picker, believes the market has hit the bottom, despite the FTSE 100 falling back below 4000.
  
  By Abigail Townsend
  Last Updated: 7:24PM BST 11 Apr 2009
  
  The well-respected Mr Bolton, president of investments at Fidelity International, said that although the recent rally had come to a halt, underlying conditions had not changed. These include an increase in director dealing and negative consumer confidence – in other words, sentiment is so poor it has nowhere else to go but up.
  
  He also pointed to positive economic indicators like an increase in China's official purchasing managers' index last month.
  
  The FTSE 100 has jumped since the beginning of March, moving from around 3542 to a high of 4124 in early April. But in the last week it has started to fall back again, going as low as 3925.
  
  A stronger session on Thursday saw the market close for Easter in positive territory, the first time since April 2, ahead 58 points at 3983. Bears remain convinced the rally was little more than a "dead cat bounce" or bear market rally.
  
  But Mr Bolton remains unfazed. His beliefs were underlined by a survey from his firm that found investing when consumer confidence is at a low point, such as now, can generate an average of 13pc more in annualised returns.
  
  He did, however, concede that conditions would remain bumpy for the next few months. "The market recovery won't necessarily be in a straight line and we'll still see some ups and downs, the pattern we have seen recently."

See also: Anthony Bolton : Why Now's The Time To Buy!

Anthony Bolton : Why Now's The Time To Buy!

Legendary investor, Anthony Bolton reckons that it's time to buy! Why now's the time to buy

• After all, Mr Bolton is one of the most successful investors alive today.
  
  He managed the £2.4bn Fidelity Special Situations fund for 28 years, during which time an investment of £1,000 would have grown to £147,000.
  
  With characteristic modesty, he admitted over lunch this week that he was "a bit early" in turning bearish. When he warned in November, 2006, that the bull market was long in the tooth and share prices seemed unsustainable, the FTSE 100 traded at around 6,000. It went on to top 6,600 before beginning the long decline to where we are today.
  
  More importantly, for an army of investors who follow the "British Buffett", Mr Bolton added that he has been buying shares for the first time in two years because some valuations are the cheapest he has seen in a lifetime.
  
  Speaking at his offices in the shadow of St Paul's Cathedral – where, incidentally, this multi-faceted man has had his choral compositions performed – he said: "Investors who sell now are making the great mistake of being shaken out when markets are low.
  
  "They are probably the same people who bought when markets were high. If you are panicky by nature, you should not have invested in shares in the first place.
  
  "An important part of what responsible fund managers and financial advisers should be doing is hand-holding when the environment looks as uncertain as it does now."
  
  For those who decide that stock markets are just too shocking for them and are determined to switch into cash, Mr Bolton believes the Government should be bolder in its bid to restore confidence in banks.
  
  He said: "In the global economy, you cannot really have regulators in different regions doing different things.
  
  "If the Irish guarantee deposits without limit and Britain does not do so, then the authorities will eventually look back and see that the money has gone elsewhere.
  
  "I think Britain may be forced to follow the Irish. There is an obvious risk there in terms of the cost to the Exchequer but we may have to do that."
  
  But this long-term devotee of the cult of the equity continues to assert that the greatest gains will go to those who seize the opportunity to buy share-based funds today. He said: "For the first time in a couple of years, I have started to feel more optimistic and there have been signs of a market low.
  
  "There has been evidence of final capitulation, with people talking about looking into the abyss and how the whole system could collapse. I have applied the same analysis for 30 years to identify periods of excessive optimism or excessive pessimism and – whether it was 9/11 or when Kuwait got invaded – invested by betting against them. I had not invested in the market for years but I put some money in two weeks ago and put some more in on Tuesday."
  
  He is not a share tipster and would say no more than that he favoured "Fidelity's global funds" on the basis that "sterling is unlikely to be one of the stronger currencies in the next few years".
  
  However, he dismisses the idea that emerging markets can decouple from the woes of developed economies – predicting more trouble in Russia, in particular – and adds that the downward correction of the commodities bubble has much further to go: "After what went before, falling for a few months is not enough."
  
  He is also sceptical about some of the apparently mouth-watering dividend yield forecasts being bandied about: "Something that has not been adjusted enough are earnings estimates.
  
  "I think some are far too high because analysts are often slow to downgrade."
  
  Of course, Mr Bolton is not infallible - for example, he suffered something of a sticky patch in the three years to 1991 when costly mistakes included Polly Peck, a 1980s go-go stock which eventually went bust.
  
  Today, he remains cautious about the timing and shape of the recovery ahead.
  
  He said: "Because of the credit overhang, it will be a protracted and slow upturn; I am not looking for a fast recovery. The current bear market started 15 months ago – which is longer than most bear markets have lasted – and the first sectors to suffer were financials and consumer cyclicals – such as retail and media stocks – and I expect these sectors to lead the upturn.
  
  "The Lloyds TSB takeover of HBOS should go through and will go through. Their share prices today will be seen as anomalies with the benefit of hindsight.
  
  "But I expect lots more regulation of the financial system, banks in particular, and taxes will have to go up to pay for their rescue."
  
  He is scathing about some directors' failure to accept responsibility for destroying household name institutions: "Where they have lost a huge amount of value for shareholders, there has got to be a question about whether the management should remain. When the rewards are there for shareholders, we expect directors to be paid well – but when they are not there, we don't expect them to continue to be remunerated in that way."
  
  Pressed on the specific example of Sir Fred Goodwin, the chief executive of Royal Bank of Scotland, who received substantial bonuses after the £47bn takeover of ABN Amro – now regarded by some critics as a deal too far – Mr Bolton said: "Knowing one of the non-executives recently appointed at RBS, I would be surprised if he went there and expected things to remain the same.
  
  "I agree with Charlie Munger, Warren Buffett's partner, who said that when the ship hits the rocks, the captain loses his job. I think that's a good general principle."

Source of article: here

Do note:

1. He doesn't think highly of emerging countries!

2. He does not think a fast recovery is possible.

3. He expects commodities to go down more!