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Thursday, 2 March, 2000, 16:29 GMT
Bye bye Dr Doom
FTSE 100 1997
Dr Doom has been predicting red screens all round
By BBC business reporter Martin Shankleman

The City's most famous stock market pessimist is packing his bags.

Tony Dye is quitting as chief investment officer at the asset management company Phillips & Drew, as part of a wide ranging shake-up.

tony dye
Tony Dye: could he yet be proved right?
Mr Dye, nick-named Dr Doom in the City, gambled billions of pounds of clients' money in anticipation of a stock market crash which failed to happen.

His bosses seem to have finally lost patience.

"He made a basic error that virtually every traditional investor has made," said stock market historian David Schwartz.

"He didn't realise that the technology sector boom would go on far longer than anyone dreamt."

As far back as 1995, Mr Dye adopted a pessimistic stance, convinced the stock market was overvalued. He backed his judgement by putting 15% of the 54bn under his control in cash, and watched as the stock market soared.

Ironic timing

In the last five years the FTSE 100 index has climbed by more than 100%.

The irony is he may well be right, but at the wrong time

David Schwartz, market historian
"He made a judgement, based on the past", says David Schwartz, " the irony is he may well be right, but at the wrong time".

To compound his losses, Mr Dye shunned the glamorous hot sectors such as telecoms, net stocks and drugs, preferring to back "value" investments in low technology fields like food, building materials, and utilities.

His position looked increasingly precarious as Marks & Spencer and Astra Zeneca withdrew their business and went elsewhere.

The final humiliation came when Phillips & Drew came 66th out of 67 in a recent league table of British institutional fund managers.

Ironically, his departure co-incides with a growing belief that a stock market correction is imminent.

"Dye's departure may be the biggest sell signal for technology stocks yet", said Margaret Doyle, finance correspondent of the Economist.

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