For one, it suggests economic demand is actually still pretty strong, which could be good for corporate earnings. James Aitken is very much in the camp that central banks, including the RBA, will need to keep raising rates in the face of persistent inflation and wage growth that he says is much higher than the market thinks, including in Australia where he believes wages are rising at more than 7 per cent, double the 3.5 per cent suggested by official figures.Īitken says taking rates higher will spark “nationwide bed-wetting”. Those cuts will be good for equities and virtually everything else, Gor says – although clearly the pain that economies would be experiencing would not be pleasant. Gor’s view is predicated on the idea that the supposedly idiosyncratic problems we’ve seen in financial markets, including most recently in the US regional banking sector, are indicative of more systemic problems that will eventually lead to a collapse in lending and a deep recession that will force central banks to start cutting interest rates late this year, and cut even more aggressively next year. I think you can buy big-cap equities, tech equities and certainly digital assets with your eyes closed now.”Īt a conference where the consensus – including from investors James Aitken, Future Fund chief executive Raphael Arndt, veteran value investor Rob Arnott, debt investor Christopher Joye, economist Gerard Minack, fund manager Fleur Wright and Singapore-based Danny Yong – was for asset prices to come under further pressure as central banks took further action to defeat inflation, Gor’s apparent bullishness stood out. “I think you can close your eyes now and just pretty much buy every asset class out there. Vimal Gor, the chief investment officer at Trovio and the former head of bond, income and defensive strategies at Pendal, had a simple investment tip at The Australian Financial Review Alpha Live conference in Sydney on Thursday: buy everything.
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