Ruffer duo flee safe stocks on 'eye-watering' valuations

Fearful of valuation divergence

Steve Russell and Hamish Baillie, managers of the Ruffer Investment Company, have said they are fearful of the "eye-watering" valuations of companies perceived to be safe and have been selling these down in the portfolio.

The pair said there is a clear divergence between those stocks which are perceived as 'safe' and trading at sky-high valuations, and those which may be unsafe, but whose valuations "in no way reflect the current reality of near zero interest rates". Russell (pictured) and Baillie said: "We are increasingly fearful of the apparent safety of the former, mindful that, for stock prices at least, valuations in the end almost always triumph over quality, and that safe companies can be transformed into dangerous investments merely by the trick of higher share prices." Ruffer duo: Expect trea...