A Breath of Fresh Air

We all let out a huge, collective sigh of relief as we sat in the packed-out auditorium listening to the king of the FTSE addressing this year's National Association of Pension Funds investment conference in Edinburgh yesterday.

Why? Because Anthony Bolton (above), the man who so often gets it right, is optimistic – he was all green shoots.

Detailing his thoughts to the 800 or so pension schemers, the Fidelity fund guru said he believes this washing machine-style turbulence in stockmarkets the world over is coming to an end and that we are at or near the bottom of the market – hallelujah, where’s the champagne?

He said, during his key note speech: "I am optimistic. I think we are at or near the lows in stockmarkets. I think there are some very tentative early signs that things are improving."
Bolton added that supremely negative consumer sentiment generally signals a turning point and that at the moment it was the worst he had seen it since the 1970's.

He said: “In the past, you can see that when consumers are very negative it has nearly always coincided with turning points or bottoms in the market. The consumer is very negative today and I think this will again coincide with a low. I have not seen negativeness like this since the 1970’s.”

And who would have thought he would be touting banks as a good place to get back into the market?

He said: "Financials have very much led this downturn. I think they will be very much at the heart of the upturn as well. Although banks over the years have been generally a place that I have been underweight, because I think they are very difficult to analyse and that it is very difficult for an outsider to know the true position of a bank, I actually think if you buy a basket of banks today you will do well over the next few years.” A refreshing thought given the state the banks are in at the moment.

A further interesting point that came out from the Q&A session. When quizzed at the conference as to who was to blame for the financial crisis, Bolton reaffirmed his view that the FSA should take the brunt.

He said: "There are a lot of people to blame for this crisis. It is a crisis that has had many ingredients, but I have to say that when it comes to the UK banks the person who had the best information and whose job it was to regulate them was the regulator, therefore I think the most blame has to go with the regulator."