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Bramshott Capital is a hedge fund started by Paul Findley, a former Moore Capital Management portfolio manager. The flagship, Bramshott  European fund has returned, net of fees, of 2.64% through May. Last year the fund lost 5.41%. The fund currently has around $260 million assets under management. The firm manages close to $700 million.

In recent weeks and months the growth in equity prices has been stymied since the powerful rally in the assets that was experienced in the first quarter of 2012. The slow down, and sometimes full stop, equity values has contributed to a growing dissatisfaction with the market and a more pessimistic outlook for many investors.

The S&P 500 is below where it was a month ago and far below where it was three months ago though it is above monumental lows suffered at the beginning of June. The outlook for equities may seem to be dire, but at least one firm is fighting the flow and looking at grand opportunities among the assets.

Bramshott Capital, in regards to its flagship fund Bramshott Europe Fund, has counted out a great deal of opportunities relating to equities. Most of the assessments are based on wider trends that will cause a rebound in the entire asset class rather than specific stock movements.

The hedge fund’s analysts expect that there will be a devaluation of currency in both Europe and the United States very soon as Central Banks on both sides of the ocean begin to print money. The fund does not predict what form this printing will take but it is expected to happen in one way or another.

The downward pressure on the value of money is generally expected to cause a rebound in the prices of other assets. This is one of the reasons behind the first two rounds of quantative easing pursued by the Federal Reserve since the 2008 financial crisis.

Along with the credible assessment of a rebound in those prices, is the current attitude of the markets towards equities. The overall negative picture drawn of the equity market means that positive indicators could have very quick and powerful effects as attitudes change. The bolstering of price through currency devaluation could be just the positive indicator necessary to cause a flood of money back into equities.

On top of those wider effects, individual firms that have not been really effected by the current crisis have been devalued because of it. Looking at the actual P/E ratio of many firms gives a compelling reason to look at their stock as a well performing asset. If a positive break comes, calculations like these will be key in turning it into a flood.

It’s not all good news on equities however. Many are still overvalued in relation to the performance of the rest of the market. Findley points specifically to German equities as possible short opportunities. German stocks have not yet suffered the devaluations experienced by many others in Europe.With no end to the crisis in sight a move on them could be around the corner.

The top long positions being held by Bramshott are in Persimmon plc (LON:PSN), an English company mainly involved in the real estate market, Royal Dutch Shelll plc (LON:RSDA), and DS Smith plc (LON:SMDS). Short positions were only disclosed by sector.

Findley paints an optimistic picture of the medium term future of the equity market, though not one that is altogether convincing. It relies on far too many exogenous events to either happen or to fail to happen. Despite that there is some good news on the equities front contained in this report.