Shrinking market presents opportunities and problems

The UK market is shrinking and this is due to a number of factors such as companies buying back shares and private equity buybacks that look like good relative value but are cheap in absolute terms. From an investment perspective, this shrinking is leading to both opportunities and difficulties. Private equity, as well as M&A activity, will continue to provide support for a market running out of steam. But otherwise investors are probably going to see some pretty slim pickings over the next few quarters. The main problem is that for every ungeared pound of earnings a company has, it seems...