Obe Ejikeme, global quantitative equity analyst at Carmignac, said he had capitalised on last year’s fourth quarter slump in global equity markets, taking a bullish stance towards equities in December.
Ejikeme (pictured) said global equity markets are even now only at the beginning of a recovery, and a bull market is imminent in the coming months.
Ejikeme suggested business cycles could be broken into four phases: speculative, capital preservation (which he candidly said equated to a recession), scarce growth, and recovery periods; with each cycle lasting three to four years. It means, he said, the probability of a sharp recovery was high, on the basis of historic macroeconomic cycles.
‘Things can only get better,’ said Ejikeme. ‘While recessions are becoming quite normal’, noting three economic dips since the financial crisis in 2008. He said he believes there will be an upward trajectory over the coming months.
Ejikeme added mass sell-offs were often due to psychology, rather than legitimate concerns for underlying companies: ‘When every stock in an index is collapsing, you should never sell. That’s a sign of an irrational market.’
Ejikeme suggested the global slowdown had started months before the late 2018 dip. ‘At the beginning of 2018, everybody thought there was a global synchronised recovery. We’ve gone from massive optimism to massive pessimism.’