[Editor’s note: This letter was penned by Tim Price, London-based wealth manager and author of Price Value International.] ‘It is because the public are a mass – inert, obtuse and passive – that they need to be shaken up from time to time so that we can tell from their bear-like grunts where they are – and also where they stand. They are pretty harmless, in spite of their numbers, because they are fighting against intelligence.’
– Alfred Jarry, ‘La Revue Blanche’, 1897.
What – if anything – can we conclude from the latest Bank of America Merrill Lynch Global Fund Manager Survey? The survey was conducted between March 4th and March 10th among 209 panellists managing an aggregate $591 billion in assets. Most types of investment life forms participated, including pension funds, insurers, hedge funds and mutual funds. (Somewhat disconcertingly, the single largest cohort of investment managers described their investment time horizon as ‘3 months or less’. That sounds less like disciplined fund management and more like speculative trading.)
Among the highlights:
Cash levels were down from their recent high of 5.6% in February. This, with hindsight, was an ‘unambiguous buy signal’, since which point stock markets have risen by 11%, high yield by 7%, and oil by 31%. But cash, at 5.1%, is still a shade above its 3-year average of 4.8%. The monthly jump in allocation to commodities was the biggest on record.
This post was published at Sovereign Man on March 21, 2016.