Extract from yesterday’s New Statesman online:
Q: What will be the best trade of 2011?
A: Buying sovereign debt. I’ll be buying cash bonds in short-dated maturities issued by Portugal, Ireland and Greece. Everyone else is selling still, and the returns are amazing for what is basically German and French risk. Portugal is the raciest, because if Spain does go down, it will be massively hit.
A more off-the-run trade is buying up Spanish property. The cajas won’t sell you foreclosed property at the clearing price, but they will sell it at the price they hold it on their books and give you a 98 per cent, non-recourse mortgage at close to nought per cent interest. It means you put down a couple of grand and, if my nightmare scenario doesn’t play out and Spanish property recovers, you make a fortune.
Q: A final message for New Statesman readers?
A: Warren Buffett got it right: “Be fearful when others are greedy, and greedy when others