Fund manager turned anti-corruption campaigner Bill Browder is advising investors to hang on to their cash until central banks stop raising interest rates and the cost of living starts to come down, before investing it strategically.
Opening the seventh Sohn Hearts & Minds investment conference in Hobart via a live-cross, the co-founder of Hermitage Capital Management believes sitting on yielding cash, such as a term deposit, and accumulating dry powder to buy things when they get cheap is the best strategy.
“There are going to be some really sweet opportunities to invest once we get to a point when interest rates are peaking, and inflation is starting to go down,” he said, forecasting opportunities across “all sorts of assets”. He stopped short of naming specific investment targets.
Until then, Mr Browder expects asset prices to fall further as central banks keep tightening monetary policy to tame inflation.
Annual inflation in the UK rose to a 41–year high of 11.1 per cent in October with the euro area not far at 10.6 per cent. Japan’s core CPI accelerated to a 40-year peak after decades of deflation.
The London-based investor, who does not manage external money, said the distress in markets had already created short-term opportunities and he expected “a lot more” across myriad financial markets.
The American-born political activist predicts that the influence of Russian President Vladimir Putin on financial markets and the world will diminish as the world gets used to his behaviour.
He praised US President Joe Biden and other Western leaders for giving Ukraine enough military and financial resources to stop Russia from winning, but wished they had done more.
“Biden hasn’t given Ukrainians enough to beat Russians,” he said, referring to air defence weapons, which he said, came late in the conflict.
The financier believes Mr Putin’s plan could be to keep dragging the war on, keeping oil and gas prices high, creating a flood of refugees and fostering discontent.
Mr Browder was the largest foreign investor in Russia until 2005 when he was denied entry to the country and declared “a threat to national security”. He said $US1 trillion had been stolen by Putin and his “cronies” since he came to power.
“If for some reason he ever loses power, he loses that money, he goes to jail, and he probably dies because Putin has put himself in a situation where his physical survival is dependent on him staying in power,” Mr Browder said.
“He’s now getting worried about people coming for him because he’s done a lot to justify it.”
Mr Browder, who watches Mr Putin’s every move, described the Russian president as “just a little man who stole a ton of money”, and believes he will fight to the bitter end.
“The end game is either Russia wins or Ukraine wins. There’s no negotiation. He never negotiates, he never backs down. For him, the only negotiation is a total capitulation of Ukraine.”
Mr Browder said nuclear weapons would not solve the conflict but could terrorise people.
He has long argued that Mr Putin’s invasion of Ukraine was designed as a distraction – a quick victory that would help cement his popularity and power among a Russian populace showing signs of growing weary of his rule.
But with the war dragging on, casualties mounting, and Ukraine fighting back with the support of the West, the war had turned into a domestic crisis for Mr Putin as the elites disagreed with him for the first time since he took power in 22 years.
Mr Browder said he has no plans to enter politics and follow in the steps of his grandfather Earl Browder, who became the leader of the Communist Party and ran for US president in 1936 and 1940.
“I would never want to become a government official or a politician because I can actually make more of an impact from outside than inside,” he said.
“I went from being a hedge fund manager to human rights activist and I’m going to carry on going after bad guys around the world to help victims because that’s something that I find very meaningful and satisfying,” he said.
This article was originally posted by The Australian Financial Review here.
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