Markets Just Got Too Rich for Private Wealth Manager Cashing In

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(Bloomberg) -- The bull run in equities may have further to go in the view of some, but for one Sydney fund manager, now’s the time to cash in your chips.

Karl Goody, a Sydney-based private wealth adviser at Shaw and Partners Ltd., said Wednesday that he’s been unloading some of his holdings of shares to bulk up in cash. He was so convinced that the run-up in stocks round the world to historic highs was bound to reverse that he placed bets with options on a pull-back, which are now paying off, he says. 

In Asia, the sell-off extended to a fourth day on Wednesday, after a regional gauge hit a decade high last week. The S&P 500 Index remains within 1 percent of its record high, also reached last week, while the Euro Stoxx 600 is about 3 percent off its November peak. Goody indicated it may be a while before he’s ready to jump back into equities.

“I’m still sitting on a lot of cash,” said Goody, whose company manages about $9.1 billion. “We rallied a huge amount and got more and more expensive. The market is overvalued.”

The MSCI All-Country World Index trades at about 17 times projected earnings, around the historic highs reached in the past decade. With the U.S. Thanksgiving holiday next week and Christmas soon after, the temptation may be there for other fund managers who successfully rode market strength on the way up to pare back some exposure.

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