«There are clear signs of excess», says the author of the monthly «Popular Delusions» report.
Still, Grice characterizes his current investment stance as reluctantly bullish: «Central banks will overcook the economy, everything is set for a few years of overstimulation in monetary and fiscal policy.»
This won't end well, he adds, but until then the equity market boom could continue.
In an in-depth conversation with The Market NZZ, Grice explains how investors could navigate the current environment and where attractive investment opportunities still exist. Grice is particularly bullish on the uranium and oil & gas sectors.
Mr. Grice, in your latest Popular Delusions report, you call yourself «reluctantly bullish». Why?
I like to feel that if I'm underwriting risk, I'm getting well paid for it. And right now I don't think that's the case. It doesn't really matter which segment of the market you look at, risk premia are almost universally tight. Risk premia are back to where they were pre-Covid, in some cases even tighter, and they were already unattractive before.
So if you put on your value investor hat, you can't see any value?
Generally not. There isn't any broad value except for some specific pockets. Back in March of last year, we were very bullish. To be clear, that was not because we thought we could identify the bottom, but because we could see panic and dislocation. It is a core belief of mine that you have to take the other side of a market that is in panic selling mode. That's when you have to be buying.