World’s most powerful hedge fund and founder of Hargreaves Lansdown both tip markets to crash again this year
The founder of Britain’s biggest stockbroker and the world’s most powerful hedge fund have tipped markets to crash again this year.
Share prices have rallied since governments began injecting billions into faltering economies.
But Peter Hargreaves, who set up Hargreaves Lansdown from his bedroom in 1981, and Elliott Management are warning of further heavy falls.
Market bounce: Share prices have rallied since governments began injecting billions into faltering economies
Hargreaves, who still owns 24 per cent of Hargreaves Lansdown, told The Mail on Sunday: ‘I don’t think the rout is fully done.’
He feared that relaxing the lockdown would lead to more infections, adding: ‘Then we might need another lockdown, with the impact that would have on the economy.’
Hargreaves is usually bullish, rarely predicting falls. He sold £550 million of Hargreaves Lansdown shares in early February – just days before the rout began – but described this as ‘sheer luck’.
The Mail on Sunday revealed that by mid-March the 73-year-old was reinvesting some proceeds. He now says he may have acted too hastily, adding: ‘I sort of wish I hadn’t. I might have gone in a bit early.
‘Trump is a law unto himself and could make some crazy decisions that might help America but not the rest of the world.’
In the US, Elliott told its clients: ‘Our gut tells us a 50 per cent or more fall from the February peak might be the ultimate path of global stock markets.’
Given that the FTSE100 hit 7,675 in mid-January this would see it sink to 3,837.
Elliott’s average return over four decades is 13 per cent a year, but it said in its letter to investors: ‘To us there does not appear to be a gilded cornucopia of shining bargains.’
Hargreaves, though, said he was scouring the market for shares at decent prices, adding: ‘I’m thinking to invest some more money from the share sale right now.’
But he also warned many companies could become obsolete following the crisis: ‘A lot of people never fully embraced the internet. I, for instance, used to write cheques to pay my bills but since the lockdown I have started using online banking and I can’t believe how easy it is.’