So says fund manager Lars Dijkstra of Kempen Capital Management, a Dutch money management firm. You probably don’t know who Dijkstra is, but he coined the term the “great recovery” when he turned very bullish earlier this year. He now believes the odds of a W-shaped recovery are on the rise and that it is time to sell equities:
“In April, when most people were talking about ‘The Great Recession,’ I introduced the term ‘The Great Recovery. The minute liquidity returned, we could expect a very strong economic recovery. It’s a one-time move, comparable to an elastic band: if you expand it and release it, it will jump up, but before it finally stops moving there will be a lot of aftershocks.”
His reason for selling? He sees underlying weakness in the economy that the market has not yet begun to price in:
“New orders dropped, inventories rose, so in this regard we seem to have reached the top. Markets haven’t responded to this yet, but for us this was the reason we decided to start taking profits in some categories.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.