Alan Steel Asset Management’s US-based Financial Analyst Criticises Sub-Prime Mortgage Fears as ‘Beyond Lunacy’
A leading US fund manager who advises Alan Steel Asset Management, the current UK IFA Investment Adviser of the Year, has criticised investor panic in the equity market over sub-prime mortgages.
Mike Williams, Chief Executive of New York based Genesis Asset Management, and a highly-regarded contrarian market forecaster, believes that the fear stalking global stock markets over sub-prime lending in the USA is ‘beyond lunacy’.
“Our view is driven by the psychology of crowd behaviour. The crowd is invariably wrong: when they think the skies are blue, they’re wrong. For a number of years the global crowd hasn’t wanted to accept that we’re OK and that there are no disasters coming along. They like to be afraid. They can’t take the set-backs and they’d rather get out of the market and wait and see. Once the sub-prime threat has gone there will be something else along to that which they’ll see as being even worse.”
“Despite the current volatility, the long term approach to investment is the right one. If you want a boom you must accept that there are some unknowns and they will scare some of us. The market is telling us you can grow yourself out of the problem there is surprise when people realise it’s going to be OK.”
“Certain sectors are currently the ones to be in – technology, industrials, raw materials; but the financial sector will improve also. People will then start buying and when there’s no one left to buy there will be surprise when the market falls back.”
Alan Steel Management is the only investment organisation Mr Williams works with in the UK, though he said: “I work with a ‘number of ‘Alan Steels’ in the US as well as with major firms such as Morgan Stanley.” He has been operating as an investment analyst since 1982.