In August of 1979 Businessweek in the United States ran a very famous cover story on The Death of Equities (which through the magic of the internet you can read) and how inflation was destroying the stock market. Three years after that cover the S&P500 went on one of the greatest bull runs in history, notwithstanding 5 recessions, the 1987 stock market crash and the dot.com tech wreck. So when the Financial Times late last week made the same declaration and claimed that 'Institutional investors, from pension funds to mutual funds sold directly to the public, have slashed holdings in the past decade. Stocks have not been so far out of favour for half a century. Many declare the "cult of the equity" dead.' It was only a matter of time (measured in minutes these days) before people responded with articles like this 'The death of Equities.....again?' and this one ' The seeds of a new secular bull market are being sown'.
Only time will tell of course but the debate is always interesting to follow.
The other big story over the past month has been around Facebook and it's public listing which is now being described as a disaster. Setting aside all of the issues around who knew what and the technical glitches on the day the underlying fundamentals lead to some pretty obvious conclusions. Our Wealth Management Director, Daniel Minihan, posted on his blog about this, including some really interesting charts from the New York Times titled 'Facebook and the case for Irrational Exuberance' To get more regular updates you can follow Daniel on Twitter.
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