Markets: Back on form Down Under
Gerard Minack is back in the game.
The former Morgan Stanley strategist has started his own advisory firm on financial markets for institutional investors around the world, according to a document supplied by the Australian Hedge Fund Forum.
In May this year, Minack retired from Morgan Stanley where his concise, two-page notes titled “Downunder Daily” were a must-read. He may repeat that at his own firm, where he will write on fundamentals. Minack believes that investment performance is driven by valuation, currency, monetary policy and economic growth.
In his last note for Morgan Stanley, Minack says analysing financial markets is best left to professionals such as him, just as playing tennis at a Grand Slam tournament is best left to players such as Roger Federer.
Minack has a reputation of being a bear. He warned investors gathered at the Australian Hedge Fund forum in Sydney on Tuesday that markets and economies are choked full of leverage. He says the US and European economies after so much central bank support are fragile. Stock markets are not so much over valued as vulnerable to earnings disappointments, he says. The potential of left-wing governments being reelected could damper investor sentiment, he adds.
In short: be cautious.