B U L L’ S
SOMETHING THAT Spear’s has become accustomed to hearing from the private client world is that the end of the economic cycle is nigh. Clients, by extension, are being cautioned not to take the current expansion for granted – yet at the same time to stay invested. Quite what are they to make of that?
What we know is that this bull market is remarkable, the longest in history. As of its tenth birthday in early March, the S&P 500 has given a 17.68 per cent annual return and added $17.5 trillion on a stock basis. Fuelled by low interest rates, Chinese economic advancement and high-growth technology firms, it is a fitting testament to this age of extraordinary innovation.
Yet the voice of doom cannot be silenced. In Q4 2018 oil prices nosedived, corporate bond spreads widened and global equities were sold off in the worst market performance since 2011. The market has since recovered, but the bearish opinions linger even now.
‘It could be that valuations continue to be stretched and markets keep going up, but we do expect volatility as we get towards the end of this cycle,’ one wealth manager tells Spear’s, echoing the nervous sentiment of many in the City.
According to the opinion of 53 economists surveyed by the National Association of Business Economists in the US, the American economy is sliding towards a recession by the end of 2020. Fully 15 per cent believed the recession could start by the end of 2019, with 60 per cent siding with a recession by the end of next year. Talk of interest rate rises in the US have been replaced with predictions of cuts, amid continued fears of political risk.
Elsewhere, authoritative forecasts see the world economy clipping along at north of 3 per cent in 2020, all pointing to the sad truth that all such conclusions are entirely limited in their value.
So what is the Spear’s reader to do?
Ignore fear at your peril, even if you aren’t yourself afraid, because fear – as everyone knows – is a stronger driver of market sentiment than anything else, greed included. Assume a defensive position and make sure you’ve got enough powder to make a killing when the market does fall. And in the meantime, listen to your wealth manager. After all, that’s what they are there for.
disguises the fact that the domestic game is at a low ebb, too. Counties are clashing with the England and Wales Cricket Board over its bizarre new spin on the game, ‘The Hundred’, to be introduced next year, which will be even shorter than Twenty20. There are plans for tenball overs and it could even dispense with the LBW rule – which would totally transform the way the game is played.
Sport, like anything, must change to remain relevant. But in their attempts to compete with shortening attention spans and glitzier spectacles in other sports, cricket’s bureaucrats at the ECB risk denuding the game of the very things that make it unique. That would be selfdefeating and would fail to capitalise on what should be a golden opportunity to bring the game to a new generation.
‘IT’S CRICKET’S BIG YEAR,’ Jonathan Agnew told Spear’s when the commentator sat down to look ahead to this bumper summer of leather on willow (turn to page 22). The two most important events in the sport’s calendar run back-to-back, with the World Cup final on 14 July followed by the Ashes barely a fortnight later. But even if England win both (and they actually might), the celebrations won’t be enough to mask the ailing health of the game itself.
There’s more money in cricket than ever before, thanks largely to a stepchange that began in 2008 with the Indian Premier League 20-over tournament. It created a ready platform for advertisers eager to tap into the subcontinent’s middle-class consumers. However, there are also record levels of confusion and mismanagement.
The 2019 World Cup features only ten nations – gone are the likes of Ireland, Scotland, the Netherlands, Bermuda, Kenya, Namibia and Zimbabwe. This isn’t good enough. If cricket is a global game, it doesn’t look it. In the UK, the only free-to-air TV coverage of the World Cup is on Channel 4 at 11:30pm or later, way past the bedtimes of most youngsters who could otherwise benefit from this festival of cricket in their back yards. As the Guardian pointed out, Sky’s coverage of the last home Ashes attracted similar viewing figures to a 1974 Columbo movie over on ITV3.
The international summer of fun also
MARS ATTR ACTS
ELON MUSK AND Jeff Bezos, the wealthiest people on Earth, are banking on colonising Mars in the next decade or so. Britain, with its space capabilities and expanding space tech scene, could and should be at the forefront of this mission – as our interview with the UK Space Agency’s Graham Turnock (page 54) makes clear. Indeed, Turnock believes British astronauts on Mars are ‘definitely’ a possibility.
There is more than just good money to be made, though Mars will undoubtedly yield valuable resources that – who knows – may not be present on Earth. The chief consideration, however, is that colonising Mars is just good old-fashioned risk management for the species – albeit on an interplanetary level. The resources of the Earth are finite and the human population is forecast to reach nine billion over the next 30 years.
After Mars, there’s Titan – perfect for when Earth goes pop. Just 750 million miles away at its closest, Saturn’s largest moon will be the ultimate getaway. Meantime, there’s gold in them hills. S