Unlock Editor Digest for FREE
Roela Khalaf, Ft Editor, selects his favorite stories in this weekly newsletter.
It’s time for me to eat some humble pie. Just one slice, think about you. It also involves a port of the graham cap from Portadown.
I don’t have personally learned that Graham, but our paths cross the worst days in the world’s markets, if the US stocks flow to global trade tariffs.
The Ulster on the BBC Radio kindly asked me the wind to mean the masses what was going on. First question: “So Katie, what is a stock market?” (For the record, I don’t love that. There is a real thing like a query financial market.)
However, Graham called to share his eyesight, which, in paraphrase, didn’t he know any kind of detail, but he had to buy it, and he had to buy it, and he bought it. If I remember correctly, it’s at lunch time on London on April 9. The stocks in the US fell by 13 percent of these days at this point and global markets bleeding.
Now, I didn’t tell Gram that he was wrong. But I said, while promoting I didn’t give investment advice and he would never have been, that he was better than I was. Purchase of dipping, in fact, a tried and tried tactic with a good record of success but, at that point, it’s good to say things bad.
We all know what happened later. Trump backtolcked, stocks explode higher. If Graham from Portadown was true to his word, and he really wasted the courage to buy (he sounded about 25 percent of our short chat. Kudos, Graham.
Even at that point, I don’t see that the beach is clear, wrote a few days ago the case for the purchase of DIP is Shoxy to me. Hindsight is the most wonderful thing, especially in markets, but to retrospect, Trump has truly released the chicken, and everything has changed. US stocks, as measured by S & P 500 Blue-Chip Index, spread back to record high and preceding 7 percent to this year.
“We have this division,” says Vincenzo Vedda, Chief Investment Officer in DWS in Germany. “Experts look at it and say ‘it’s wrong’ and the shopping is saying ‘Experts say in the last 10 years to buy the dip.”
In any case, they are correct. So, a slice of humble pie is consumed. Delicious.
But I don’t eat the rest of it. Since April Shake-out of markets, and even before it, most of the large investment houses outside the US are recovering their exposure. This is the number-one subject of conversation between institutional investations today, and it will take several hours, perhaps even in years, for perfect play.
Every week, Florida men with Hotmail addresses informing me that I am an idiot, as a “stupid face”, for suggesting this event. No serious money manager, they say, sell their stocks in the US and bundles.
But it remains wrong with the situation. It is not that big investors may not sell US assets in meaningful quantities. The question is if they continue to buy this on a scale we are used to a world where US stocks account for something like 70 percent of market indices. Perhaps every new pound hits a fraction of the stock feature now, we cannot see 70p head in the US five years, but something like 65p or even 60p.
That means a larger particle of Asia and Europe – a smaller market that many investors in the world have sailed for years. Well, no wonder many of them are comfortable moving the performance of the US stocks in 2025. Many European indicators are above 20 percent this year. Meanwhile, for euro-based investors, the steady drip of dollar has eaten any profits. They are still down to about 6.5 percent of US stock so far in terms of euro.
Any large asset manager who doesn’t think about how to avoid or at least belt in this disease in a sliding sliding and the newly expensive stocks or political risk.
“We need to get rid of the mindset we have in the last 20 years,” said Talib Sheikh, a portfolio manager at Fidelfidity International. “Why can’t we be asia ex-china ex-japan a more part of your portfolio than in the US? Why can’t there be a larger part?
Most market disruption from the opening months of 2025 have now passed that we have been in the second half of the year, and the graham from the poraywn taking a great victory. But the oldest financial security collapses.
Katie.martin@ft.com
