It is normally quite rare to come across professionals with hugely successful careers lobbing grenades in the direction of the industry that has brought them fame and fortune over many years. When did you last hear a magic circle City lawyer or a bulge bracket investment banker complaining about the level of fees that their firms charge? It doesn’t really happen. It’s a grown up world out there and you take what you can get. So it is both interesting and refreshing to hear Neil Woodford, one of the biggest hitters in the fund management industry, politely and firmly pointing out some of the ways in which the largest firms in his line of work come up short. (This is the full version of my interview with Neil Woodford for The Spectator, published March 7th 2015).
You know when you are in a bull market when bad news simply gets shrugged aside and even the most indifferent events get greeted exuberantly. Nine months ago the result of the Italian election, which drags the future of the Eurozone back into question, would have induced a market panic. This time round the world’s equity markets barely blinked before resuming their attempt to breach the all–time peak they reached shortly before the onset of the global banking crisis.
The place to look for investment bargains, said the fund manager Sir John Templeton, is not where the news is good, but where it is really bad. Today that means looking for advantage amid the volatility and extreme valuations which the crisis in the embattled eurozone has brought in its wake. The strikes and riots that are spreading across southern Europe are exactly the kind of scary scenario in which investors with ice-cold blood in their veins, as one admirer once described Templeton, have historically been able to profit.
Terry Smith’s office is high up on the 37th floor of Tower 42, formerly the NatWest Tower, from where there is a floor to ceiling view over Docklands and out toward Essex, a neck of the woods with which he seems to be associated in the popular mind. The public image of this high profile City figure is that of a pugnacious bruiser, someone with attitude who has made good in the money markets through a series of ballsy deals, and who likes nothing better than a good verbal scrap.
Before he became a rich and admired preserver of investors’ capital, Jonathan Ruffer had, by his own account, two unsuccessful spells as a barrister. It is not long into our interview (for The Spectator) that I gain a clue as to why this seemingly harsh self-assessment might be true. We have been discussing the credit crunch, which he publicly predicted was on its way well before it hit – the Queen and others mystified by why nobody saw it coming was clearly not a client – and how governments and policymakers should best respond to it.