Martin Gilbert: UK good place to invest but global scene reminds me of 1999
City grandee Martin Gilbert has warned global stock markets remind him of 1999 – when the dot.com bubble burst in spectacular fashion.
The founder of Aberdeen Asset Management and now Revolut chair said during a panel discussion that active rather than passive investing would come to the fore over the coming years.
“When we eventually get a bear market, and I’m old enough to have seen four or five of them, active should come to the fore because theoretically growth stocks should not do as well as value stocks during that period.
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“We’re entering a time when we should tilt more from the high growth stocks to the more value oriented stocks. Certainly (global) stock markets are as high as I’ve ever seen. It reminds me very much of 1999.”
Gilbert said UK equities remained undervalued compared to global competitors, drawing particular attention to tech stocks such as Netflix and Amazon.
The last year before the millennium saw a collapse of tech stocks as valuations shot way ahead of fundamentals, driven by the explosion in the use of the internet.
A host of firms, from Pets.com to Worldcom, failed during the year. Cisco lost 86 per cent of its value, and Amazon took a sizable hit, but survived.
But Gilbert said the UK’s historical position as a cheap investment market remained.
“It’s cheap relative to other markets. But it’s always been cheap compared to the US markets since I’ve been in business.
“I think the UK is a good place to invest. The rebound (from Covid-19) is going to be pretty good.”
Gilbert was speaking at a panel organised by the Centre for the Study of Financial Innovation.
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