Russell Napier’s Anatomy of the Bear seems to be quite a cult classic among investors. I regularly see it on portfolio managers’ desks. Meanwhile, his video interviews with the FT in the years since the crisis also seem to have created quite a cult following. This week he completed his fourth interview with us since 1999, and he is sticking to his claim, based on historical experience, that the S&P 500 will need to slide down below 500 once more before this bear market is over (he did say 400 in the book).
How much has his story changed, and how seriously should we take him? This obviously divides opinion. So here are his previous interviews with us, in chronological order.
We first filmed him in Orlando, Florida, at the CFA Institute’s annual conference in May 2009. Stock markets had just bottomed and begun their recovery, and the tension created around the crisis was beginning to dissipate, but there was still much uncertainty. He was right, at this point, to predict that the rally would carry on. But what of the rest of this theories?
This is the first part of that interview:
And this is the second part, in which he predicts a “cataclysmic bear market” within two years. (It is therefore already two years late.) The trigger for this would be treasury yields exceeding 6 per cent. At present they are at about 3 per cent, which is where they were at the time of the interview:
We next met him on the fringe of the CFA Institute conference in Edinburgh in 2011. At this point he had shifted his concern from inflation to deflation – but still thought the outlook was somewhere between apocalyptic and cataclysmic.
In May last year, James Mackintosh interviewed him at the FT’s London offices. This time, like a number of other analysts who tend to be very bearish, he could see value somewhere, in Europe:
Now take a look at the most recent interview, carried out last week. He is sticking to his central call that the bear market is not over and has not bottomed. Perhaps the most interesting new element is that he is now worried about Eastern Europe: