'Crypto is the poster child of empty calorie speculation': Barry Norris on the INVESTING SHOW on how inflation could hit growth and value shares and bitcoin

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Unprecedented monetary stimulus around the world has driven stock markets higher since the coronavirus crash but what will happen now that inflation is rearing its head?

Markets are anticipating a strong recovery and fiscal stimulus has joined rate cuts and money printing in turbo-charging the US and other major economies, says Barry Norris, of Argonaut Capital, which is delivering some of the fastest economic growth that he has seen as an investor.

He says: ‘That means that this year should be a really good year for the general economy and Main Street, but it may not be as good for Wall Street and particularly those high growth stocks which benefited the most from low interest rates.’

Highly-valued growth superstar shares have the longest time horizon in term of expected returns, and Barry believes while last year was great for growth investors this year will be much better for investors in old economy companies, value and commodities. And he believes one asset that could be hit hard is cryptocurrency.

He joins Richard Hunter and Simon Lambert to discuss the best near term prospects for investing in the recovery and why he believes unfashionable European value and dividend shares could be a winner.

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Barry runs a European Income fund and also Argonaut’s Absolute Return fund, which allows him to go both long and short. He reveals some of the types of company he is betting against with short positions and why he is particularly dubious on cryptocurrency and bitcoin.

‘I would describe myself as a bitcoin minimalist,’ he says, adding that while he sees the potential in the concept, he does not see its value being justified, comparing it to a ‘pyramid scheme’ or ‘chain letter’ where those who got in early make profits and those that buy in late ‘are the fall guys’.

Barry says: ‘I see value in the blockchain idea of a cryptocurrency potentially disintermediating the need for a financial intermediary in transactions, but the problem is is that the only killer app for cryptocurrency at the moment is money laundering and financial extortion, hence the fact there is a ransomware attack almost every day.

‘For most people their interest in crypto is purely speculation. Unfortunately, crypto only has a value if everybody uses it in transactions and the only killer app at the moment is normally something that is criminal.’

He adds: ‘Crypto is the poster child of inane empty calorie speculation.’

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