THE ECLECTICA FUND - APRIL 2004
Investment Manager’s Report: No stockmarket crash….yet
We have repeatedly warned that any price series that loses 80% of its value (a la the German Dax) is most likely to double. However, little positive can be inferred from such movement. The future has not become less treacherous. Merely, an oversold asset has rallied. Danger arises where investors alter their behaviour, swinging from despair to euphoria. Sadly, this is what may have transpired in Europe. The Dax has rallied 89% from its trough and complacency abounds. Nevertheless a stockmarket crash of 1987 proportions need not arrive yet. The question is one of energy.