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Why AIM will become the world’s best market - according to Gervais Williams (What Investment)

by Nick Britton

It’s no great surprise to hear Gervais Williams, long a champion of smaller company investing, extol the benefits of the Alternative Investment Market (AIM), the London Stock Exchange’s purpose-built home for ambitious growth companies.

No fund manager has remained so consistently bullish about the junior market, and through some of its darkest periods – the tech bust, the collapse of commodity stocks, the mass exodus of companies from the market that followed the global financial crisis.

So when Williams claimed this week that AIM is set to become ‘the leading smaller companies market in the world’, few eyebrows were raised. But his optimism doesn’t end there. The thesis of his new book, The Future is Small, is nothing less than that AIM ‘will be the world’s best market beyond the credit boom’.

For those who have witnessed the various manias and massacres which by Williams’ own admission have led to a net return of approximately nil for the AIM All Share index since inception in 1996, this is a pretty startling claim.

But the last phrase, ‘beyond the credit boom’, is crucial. Because in Williams’ view (and it’s hard to deny), we are still very much in the credit boom at the moment. The global debt market was worth some $78 trillion in 2007; in 2013, following the so-called ‘credit crunch’, it was $100 trillion, according to figures from BIS and the IMF quoted in Williams’ book.

The accumulation of debt over the past few decades has meant that it has been very easy to make money. All you needed to do was buy a house, or buy the FTSE 100 index, which launched in 1984 at a value of 1,000, and today stands at 6,625.

 

See the full article on the What Investment website.