ruffer

It is striking how little little yield premium equities are offering over the official interest rate at them moment, says Ruffer’s Steve Russell. Investors may be tempted, but he warns that a cautious road may suit for the period ahead.

With the Reserve Bank of Australia opting for a surprise 11th rate hike, Ruffer’s Duncan MacInnes looks at the impossible choice central banks around the world are facing: let inflation gather steam, or act and risk a financial system calamity.

“Gradually, and then suddenly”, the old Hemingway quote goes. The same could be said for corporate earnings, which Ruffer’s Jasmine Yeo believes are in danger of taking a sharp southerly turn.

Sir Isaac Newton was one of the greatest scientists in history; he founded classical mechanics and developed the law of universal gravitation. For all that, he lost his life savings in the South Sea Bubble of 1720.

British investment firm Ruffer’s current cash weightings have hit historic levels after perceived risks in the global economy moved it to help preserve rather than accumulate capital.

As a forty-year long bull run fuelled by cheap money screams to a stop, markets are at an inflection point. This time really could be different.

The pursuit is focused, relentless and uncompromising – dismissive of any potential consequences. So what happens when the addiction is to risk?