City & Business: Look closer to home for investment gains
Sunday 12 October 1997
Last week, US Federal Reserve chairman Alan Greenspan cautioned that stocks were overvalued. European bourses suffered one of their worst weeks of the year. Technical analysts pointed to two Merrill Lynch charts (see top right) making the rounds, which highlighted ominous similarities between the pattern of the present bull market and those of the bull markets that preceded not only the 1987 crash, but the big one in 1929.
Despite the bearish indications, however, the odds against a crash remain strong. The bull market is on its last legs, but it is likely to go with a whimper rather than a bang. What lies in store after the present period of transition is a question taken up by Hamish McRae on page 7. Meanwhile, the real economies of the UK and the US look ready to cool, too.
There has been all sorts of blarney about a "new paradigm" of transatlantic economic activity. Basically, this "paradigm" boils down to a mantra-like reiteration of the benefits to be had from technology-driven productivity gains and low inflation guaranteed by cheap - but increasingly skilled - Asian labour.
These are indeed powerful forces. But the "miracle" they have generated in the Anglo-Saxon world is likely to prove as durable as the "miracle" proclaimed for the Tiger economies of Asia before a cascade of currency crises brought the region low.
What, then, should investors do? Stop searching the world for the markets with the greatest momentum. Pay less attention to global asset allocation, and more to identifying value at home.
The City is a class act on the world investment scene. By choosing Britain as the first site for Microsoft overseas investment, Bill Gates has highlighted the fact that information technology research here is also a class act. Why can't these two class acts get together to build a British IT sector that boasts big, profitable software companies?
- 1 Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
- 2 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 3 Louis van Gaal gets tough with Manchester United players, with Darren Fletcher and Luke Shaw berated in public and Phil Jones left looking bemused
- 4 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 5 Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
Israel-Gaza conflict: Deadly flechette shells 'used by Israeli military in Gaza Strip’
Malaysia Airlines MH17 crash: Blogger captures footage ‘showing BUK missile launcher that shot down jet’ now back in Russia
Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Israel-Gaza conflict: The myth of Hamas’s human shields
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...