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Ruffer: forget new normal, this is old peculiar

by David Campbell on Jun 10, 2014 at 07:20

‘Let’s be clear, if inflation expectations drift into outer space there is no Yellen put. For a time all assets – except gold and a few other honourable exceptions – will generate negative real returns.

‘As much as central banks are adamant that they are in control of the inflation outlook they also need the inflationary surprise.

‘I don’t believe in the new normal; I believe in the old peculiar, the volatile, jumpy world where honest money is made and foolish
money is lost.'

Seven of the managers' eight largest positions are in inflation-linked securities, led by a 7.1% allocation to a 2017-dated inflation-linked US Treasury and a 5.6% allocation to a 2055 Treasury.

Over the last five years the Ruffer Investment Company portfolio has returned 48.32% versus an 88% return on the FTSE World. Having traded at a premium for much of the last five years the shares have in recent months fallen to a discount.

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3 comments so far. Why not have your say?

Knowledgable insider

Jun 10, 2014 at 09:12

Was it Keynes who quoted 'when the circumstances change I change my opinion' ? I have been a long term fan of Ruffer but cant help feeling that more flexibility in their outlook might hepl their cause.

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philip brown

Jun 10, 2014 at 10:20

I’m holding on to all my Ruffer funds and wouldn’t dream of selling, but I just hope the end of the world comes soon so we can all get back to making some money again.

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Andrew Pitt

Jun 10, 2014 at 11:01

I tend to look at a calendar year's return. Ruffer Investment Company made 7.8% excluding dividends in 2013. Even Peter Spiller of Capital Gearing Trust had his first down year in 2013/14 since he started in 1982, though made 3% excluding dividends in 2013 as a calendar year. The question is whether he and people like Ruffer and Troy are wrong. Jonathan Ruffer in his last quarterly review said 'We favour tending towards being foolish now, rather than later'. He also reminds us that it was the mouse that went cheeseless was the mouse that got away.

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