For a fundamental analyst, it is difficult to determine the exact date of a “market value readjustment.” But counter-trend icon Crispin Odey says there is a logical method to determine when such potential disruptions are on the horizon. And he currently sees such issues on the horizon and has adjusted the portfolio accordingly. In part, his logic to stay out of the perceived overvalued stock market is negatively impacting fund performance in the short term, he acknowledged in a July letter to investors reviewed by ValueWalk. But Odey points out “markets do not stay stupid forever,” it’s just a matter…
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- Logical fundamental value metrics have been thrown out the window before, most notably leading up to 2001 and 2008
- A fundamental value mis-match is taking place, and stupid will eventually self correct
- Outlook is not much better, its just a matter of when markets recognize the truth
- Governments have moved away from free market philosophy and the economy no favors the well-connected, Odey says
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