By David Larrabee, CFA
London-based financial consultant Andrew Smithers is famous for spotting investment bubbles. The founder and chairman of Smithers & Co., which provides economics-based asset allocation advice, was one of the few practitioners to call the top of the equity market in 2000.
In his more recent writing, including pieces for Nikkei Veritas (“Japan’s Fiscal Deficit“) and Financial News (“Deficit Cuts Should Take Priority“), Smithers has struck a consistent macroeconomic theme: advocating for prudent and disciplined fiscal policy in Japan, the United Kingdom, and the United States.
Smithers has also gained notoriety for arguing that central bankers should factor in stock market valuations when setting monetary policy, a contention he lays out in a provocative book entitled Wall Street Revalued: Imperfect Markets and Inept Central Bankers, which was published in 2009 and reviewed by the Financial Analysts Journal late last year.
At the 64th CFA Institute Annual Conference in Edinburgh, Scotland, Smithers’ latest book will serve as the basis for a presentation that will consider methodologies for valuing equity markets and identifying signals that indicate when markets might be in bubble territory. Smithers will also address the intended (and unintended) consequences of recent central bank actions on asset prices, currencies, and economic recovery.
Before founding his eponymous firm in 1989, Smithers’ international investment experience included 25 years with SG Warburg, where he ran the investment management division. A prolific writer, his previous books include Japan’s Key Challenges for the 21st Century (co-written with David Asher and published in 1999) and Valuing Wall Street: Protecting Wealth in Turbulent Markets (co-written with Stephen Wright and published in 2000). Upon the release of this latter book, renowned investor Barton Biggs called Smithers “one of the five best, most dispassionate, erudite analysts in the world.”
Smithers investment opinion and commentary have appeared in a number of leading publications, including Japan’s Sentaku magazine, the Financial Times, and Forbes. He is a member of the Advisory Board for the Centre for International Macroeconomics and Finance at Cambridge and a member of the Investment Committee at Clare College, Cambridge (which he presciently advised to sell equities in 1999, according to Forbes).
Smithers takes the podium in Edinburgh on 10 May.
Watch Andrew Smithers address an audience at the London School of Economics on the subject of identifying bubbles and stabilizing the financial system in a video uploaded in March by the Institute for New Economic Thinking.