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Ruffer buys old tech for mini-bubble protection
by Dylan Lobo on May 12, 2014 at 13:23
The Ruffer team has added to its 'old tech' exposure in April.
These stocks, which include the likes of Oracle, IBM and Qualcomm, now account for 4% of the £310 million Citywire Selection Ruffer Investment Company .
'These businesses are at the opposite end of the spectrum to the upstarts of social media and internet start-ups,' the trust's managers Hamish Baillie and Steve Russell (pictured) said in their monthly update to investors.
'They have mature businesses which are cash generative, profitable and derive a significant part of their profits from recurring (ie relatively stable) revenue streams.
'They remain reasonably valued and have not been caught up in the hype (and disappointment) of the recent tech mini-bubble.'
April was not one of the trust's better months as its 16% exposure to Japan turned sour, contributing to 1.1% decline its net asset value compared to 2.2% rise in the FTSE All Share.
After much debate, Baillie and Russell believe their position in Japan remains justified.
The duo said: 'Japan has gone from hero to zero in a little over 12 months. While we are comfortably still in profit on our reflation trades in Japan (and we locked in some profits earlier this year) what is left has hurt us.
The team added: 'Should we be reducing our exposure further? We think not. Some of the fair-weather participants who were out of the market for many years before last year’s rally will have missed out by joining the party too late.
'They have been quick to sharpen their knives and declare Abenomics a flash in the pan and another example of a failed Japanese economic revival.'
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