It was in 1996 that Dye first argued that, at 4,000, the FTSE 100 was overvalued. He moved a chunk of his clients' money into cash, withdrawing some £7 billion from the stock market. As share prices continued to soar, he was attacked by his clients and ridiculed in the City and the press. In 1999 Phillips and Drew (P&D) lost more clients than any other fund manager and came a humiliating 66th out of 67 in an institutional fund league table. The Times described the firm as a "standing joke".
The irony was that the hundreds of fund managers who had followed the herd and been proved disastrously wrong kept their jobs, while Dye paid the price for his independence of mind. Yet he remained philosophical, taking wry comfort from Keynes's observation that "worldy wisdom teaches that it is better to fail conventionally than it is to succeed unconventionally".
In recent years Dye had issued regular warnings that house prices were overvalued, and he predicted a crash "about as bad in real terms as the crash in the 1980s". In 2002 he wrote to the Financial Times accusing Mervyn King, the soon-to-be Governor of the Bank of England, of being unwilling to speak out on the cost of housing in the UK and of "recognising a bubble [only] after it has burst".
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