Jim O'Neill: We've entered a new bull market in global equities

Investors should be positioned positively in equities, according to Goldman Sachs' Jim O'Neill, who says we have entered a new bull market.

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by Chris Marshall on Nov 30, 2010 at 15:12

Jim O'Neill: We've entered a new bull market in global equities

Investors should be positioned positively in equities, according to Goldman Sachs' Jim O'Neill, who says we have entered a 'global bull market'.

'On the back of the credit crunch, we've entered a new bull market in global equities - led by different places, different constituents and different drivers', the chairman of Goldman Sachs Asset Management said, alluding to the increasing importance of the world's emerging markets.

Speaking on the 'the world and its challenges', O'Neill pointed to the importance of the quartet of Brics - a term he coined - stating that the combined GDP of these countries would be as big as the US sometime in the coming decade.

Though he was upbeat on the prospects for the US at his talk to the CFA Society in London, he stressed that just because the US faces 'several challenges' this does not mean the world cannot survive. O'Neill added that the US fiscal position is similar to Portugal, the peripheral eurozone economy that is in the sights of bond investors for an Irish-style bailout.

O'Neill singled out two European economies - the UK and Germany. He said that he was 'relatively optimistic' about the UK economy, adding that the Office for Budget Responsibility - which yesterday forecast GDP growth of 2.1% for 2011 - was 'still catching up with reality'. Next time, the OBR will probably have to revise up its forecasts again, O'Neill said.

The UK economy's cyclicality will continue to surprise people', O'Neill added.

Germany, O'Neill said, is 'not far off boom conditions'.

'One of the most important developments in recent months is that the German consumer has started suddenly to believe in the future', O'Neill said, a fact that the media had not picked up on.

Globally, O'Neill stressed that the biggest question going forward was how China controls its inflation.

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6 comments so far. Why not have your say?

The red wine at the CFA talk must be strong and morish!

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Topped up with copious amounts of Red Bull****

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I was there - an interesting speaker and certainly some contrarian perspectives.

@Pat Murphy - it was a dry event, but plenty of caffeine.

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I've already blogged here and elsewhere that I believe that we are at the start of a new equity bull market that, whilst starting a little slowly, will last for several years to come. Too many people who should know what they are talking about are praising equities in one form or another, emerging and emerged economies have dealt and are dealing with the poor economic situations that I agree still abound; but that means that we are at or near a bottom: not waiting for one to come. In my view, we have crossed the low point and are in the long hard climb up the other side.

When there is so much doom-mongering about, that is a good sign that things really are getting better - and I mean stock markets and share prices - much as it is time to get out when your cabbie starts giving you tips and he's bought in to!

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There must have been something in the coffee!

FTSE uopto day so maybe he was more accurate than I gave him credt for!

Or he was flying a proverbial kite, just in time for year end bonus declaration

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Christian Simond

Dec 06, 2010 at 17:41

It may be stating the obvious but it is worth remembering that the last secular bull market in equities ended some 10 years ago, now. And as Bill Miller pointed out in the Insight column of the FT at the beginning of September this year, long term treasuries have "beaten equities as measured by the S&P500 in the 3, 5, 10, 15 and 20 year time frames" As a betting man you probably would position yourself thus. As for the fundamentals they are not immediately obvious but no doubt will be made clear after the event.

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