Shhhh! Keep it to yourself but the way forward is to invest in emerging markets
London is not a city to walk around. Apologies to the tourist offices, but on foot it is ugly, dirty, busy and often dangerous. Public transport is fine if you have nothing to do until the next ice age, and private transport is excellent if you have a chap with a cap and a chamois rag polishing the waiting limo. The rest of us have to take taxis.
Taxis provide excellent value, as the client, or your employer, pays the fare. Apart from conveying you safely and in relative comfort you get free commentary on all the issues du jour, from the opening of the latest lap dancing club to the state of the stock market.
If you are lucky, the previous client will have left a highly confidential file on an imminent corporate action or re-organisation. If you are unlucky, it is the last of his lunch.
Taxi drivers are a breed apart. Who would voluntarily spend all day driving around in the heat or sleet. Essex must be truly awful for them to want to come in all the way from there to do this. They have plenty of time to think, and share their views freely. Having acquired The Knowledge, they can quickly become experts on almost any other subject. And they often do.
Currently, it is technical analysis. I blame the media. Two articles in the Money Mail on Sunday about head and shoulders' patterns and taxi drivers are in there, talking resistance and support levels like pros. Unlike the rest of the investment industry, they are not afraid to call the bottom of the market.
Mr Buffet is buying tech stocks, according to taxi analyst 37621810. Warren Buffet reckons techs have reached their lows and he's buying. JP Morgan's chauffeur made his fortune listening to his boss' stockpicks, you know. Who was going to tell our cabbie that Walter Scott, the chairman of Level 3 Communications, which received $100m of Berkshire Hathaway's largesse, also sits on the Berkshire board? Or that $100m, in the context of Berkshire Hathaway's $7.4bn portfolio, is like lending lunch money?
Such anecdotes suggest that retail investors, at least, are far from capitulation. Contrary to reports suggesting the demise of popular capitalism, the doughty small investor is just re-loading that popgun, ready for his next broadside. One online poll last week showed 51% of the 2,000-odd participants considered the current market ripe for bargain hunting. Investor call centres report a few horribly ill-advised switches, but no mass redemptions.
A few shrewd players are seeking investment in emerging markets. After getting their fingers burned in 1994 and 1998 most retail investors are probably not too interested. But one of the original attractions of this asset class, when it was first identified 15 years ago, was its low correlation with what was happening everywhere else.
This is once more proving to be the case. Last year emerging markets outperformed mature markets for the first time in six years. While corporate earnings in developed markets are withering under even modest scrutiny, companies in emerging markets are doing very nicely, thank you. Unlike their First World counterparts, they have solid, simple business models, low levels of debt and very reasonable valuations.
Emerging markets weightings in institutional portfolios have been edging up from an almost negligible level two years ago to 5% now, the level they reached at the height of their popularity in the 1990s. But don't tell a soul. The bellbar's got a butterfly spread and it's way below the neckline.