Ruffer's MacInnes and Ker: Money printer won't always go 'brrrrr'

Central banks are running out of ammunition

David Brenchley
clock • 6 min read

Investors are at risk of falling into a "bull market trap", with the dual tailwinds of ever-decreasing interest rates and the so-called 'Fed put' unlikely to sustain stockmarkets indefinitely, according to Ruffer's Duncan MacInnes and Fiona Ker.

The pair of investment directors worried that valuation measurements across the board in the US market are "flashing red simultaneously". "The disconnect between what investors are pricing in and the sobering economic reality [of the Covid-19 recession] is quite stark," MacInnes told clients on Thursday (26 August). Apple reaches $2trn: Has the tech rally gone too far, too fast? "If you look at price-to-sales, price-to-book, cyclically-adjusted price-to-earnings, or the Buffett indicator [market capitalisation-to-GDP] [they all] suggest we are in the most expensive 10% of observations...

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