Yet leaving the party too early risks leaving profits on the table. Gomez-Bravo is selling into into a rising market and taking more political risk by adding to investments in peripheral governments like Greece and Italy.
“There’s more risk than reward right now,” she said. “There are real end-of-cycle fears about what performs.”
When Lehman went bust, the mother of four was a portfolio manager at its investment arm. Prior to that, she was a senior credit analyst on Lehman’s sellside but moved in 2006 citing, she says, frustration with unchecked animal spirits.
Like even outspoken naysayers at the time, she didn’t anticipate the violence of the downturn. Still in May 2007, Gomez-Bravo became cautious on U.S. risk and issued warnings on corporate health -- which bear echoes with the intense hunt for yield today.
“Everything was bid indiscriminately,” she recalls. “I knew things were heating up; there were telltale signs. It’s always difficult to leave money on the table, but as a result we avoided the blow-ups.”
Bloomberg News.