Funds hold most cash since GFC

Is the bottom in? One of the greatest contrarian indicators during bear markets is when the “professionals” move to cash, and the latest Global Fund Managers Survey has current cash levels at their highest since the 2008 top:

cash

Early days yet but the ASX200 was up nearly 2% on the open as Yen weakened and Aussie dollar is trying to get back up to 70 cents as we await the next Yuan fix and Chinese markets to open.

Comments

  1. So that graph tells us that right after Lehman fund managers ditched their cash at a time of maximum stress and did what with it? Bought shares? Smart move given what came over the next 6 months! And then, when QE hit, they started progressively building their cash balances up again into a doubling of the stock markets? So what’s next…a rundown in cash reserves into the teeth of another post Lehmanesque stock collapse?

  2. The idea of having even 6% cash terrifies me. The funds I’m in are more like 25-40%.

    Will today’s rally hold Mr Becker?

    • Why would you still be in the market despite KNOWING what’s coming down the track isn’t a mirage?

      Human nature sure is interesting. Some 4 mths ago while have sessions with a very good Physio I started discussing finance & Superannuation. In his early 40s he said he had around 120k in Super & I advised him to get into cash to sit out the coming carnage. I emailed him many links backing up my call.

      Btm line – he has done nothing -still sitting like a deer in the headlights & has lost at least $10K + so far – with much more to come.
      This is the usual reaction from joe blogs – the advisor wants keep them in & makes it hard to withdraw funds & they take what they perceive to be the easiest action. None. You’re not Joe- so ?

      • Well it is hard to be completely sure that you KNOW, when you are not a specialist, have years of knowledge and experience under your belt, or are curious and skeptical enough to question received wisdom. I pit myself as being not much above Joe Blogs, and any edge I might have is almost entirely down to this blog! I put that down to luck more than design. So at 39 and renting, I have moved a lot to cash (65% of super, 70% of savings) and hold a lot in USD, some GBP, some short AUD ETF for shits and giggles. I still have some money in Platinum, which is not exactly firing at the moment….but I figure the billionaire running it really ought to “KNOW” better than I….could be wrong tho?

        I agree though, the average punter probably hasn’t a clue, verified when I sat in a recent company talk from our super-fund and everyone around the table had no fucking clue about the kind of questions I was asking. The presenter looked visibly shocked too.

    • Well Im not Lorax, but my major fund has held between 60-70 % cash over the past 6 months, the rest Global equities all $US.Clime International Fund.

      • LOL. They were too much into the China growth story and their local portfolio got smacked as a result.

      • ALL Funds are run/managed by people “investing” OP money. (other peoples)

        That should be scary enough to get out while the goings good. Don’t be fooled by the Funds record. Records get broken!

  3. Aussie dollar cash = pacific peso, guaranteed to lose value but I agree not as much as stocks and other paper
    USD cash = better in the short term until the worlds largest debtor and war mongering nation goes bust
    Euro cash = will fail in 2016/17, unworkable system, getting ‘raped’ by the new world order in Brussels
    Gold = classic store of wealth but 5% transaction costs (loss) if you want to cash out
    Bitcoin = internet cash, welcome to the new millennium. Best performing currency in 2015 and will be the best in 2016 with the next sovereign debt crisis (yuan, euro, real, Sth Africa, Saudi, Loonie).

    • “Bitcoin = internet cash, welcome to the new millennium. Best performing currency in 2015 and will be the best in 2016 with the next sovereign debt crisis (yuan, euro, real, Sth Africa, Saudi, Loonie).”

      Or we could pick 1st jan 2014 and be better off with practically any other speculative repository of wealth. How exactly does this support your thesis?
      I think I´ll do like anybody old enough to remember preFB days and keep diversified.