K2: Why long bonds are critical for equity investors

Livewire Exclusive

Livewire Markets

Nick Griffin from K2 Asset Management says when it comes to ‘macro indicators’ the one he follows most closely is long bond rates. Artificially low bond rates have inflated asset (equity) prices and Griffin explains that anything that threatens current low rates is of concern when it comes to equity valuations. “If you look at one indicator in the world you look at long bond rates. They are underpinning equity valuations. They’re underpinning the M&A in the world because people can borrow money cheaply and invest it. Central Banks are manipulating this to a certain extent which is not very helpful, but that is the reality of the environment that we live in at the moment. So if you are looking for warning signs – it would be anything that pushed rates up, outside of strong growth.” In this video Griffin explains the events he is watching that could lead to a ‘concerning’ rise in bond rates and how this would flow through to equity valuations.

2 topics

Livewire Exclusive
Livewire Markets

Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Sign In or Join Free to comment