Monday, January 12, 2009

Open letter to the Financial Times

Even though the Financial Times has seen fit not to publish my letter, sent (e-mailed) on January 5th, the beauty of the internet means that I get to post it on my blog whenever I want!

Below is the original letter.

(N.B. Since Janaury 5th, the US stock market has fallen by 7%.)


From Mr. Wesley Fogel

Sir, Anthony Bolton appears to have had his "Buy American, I am" moment in his column last weekend "How to spot the market’s turning point" (January 3).

Just as fellow-veteran investor Warren Buffett, who endorsed buying American stocks in October only to see the S&P 500 fall a further 20%, Mr. Bolton still has faith in his ability to do what nobody else can: identify a turning point in the market.

However, the three factors which Mr. Bolton uses to determine such a turning point and the one he does not should reveal why his advice will prove at best unhelpful and at worst damaging to investors in 2009. Contrary to his argument, it will be improved visibility on the state of the economy and not the performance of markets relative to the long run or some other technical factors that will help define a turning point. Whilst it may seem foolhardy to challenge the views of either Mr. Bolton or Mr. Buffett, neither gentleman would be at odds with the principle that past performance is no indication of future returns. Now is not the time to see who is right and who is wrong, just who is solvent. The same rules apply to them as they do to us.

Wesley Fogel,London SE10, UK

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