Fidelity's Bolton Says Markets Ready to Fall, Shorts Shares By David Clarke http://www.bloomberg.com/apps/news?pid=20601087&sid=aY4u7jYFObWI&refer=home May 15 (Bloomberg) -- Fidelity International's Anthony Bolton, who has called bear markets successfully on two previous occasions, said stocks may be about to fall because there's too much risk in financial markets. Too much money is being spent on mergers and acquisitions, Bolton said at a dinner in London last night. Specifically, buyout companies are overspending on takeovers and are getting loans with few safeguards from banks, he said. Mergers and acquisitions for 2007 reached the $2 trillion mark today, 60 percent ahead of last year's record pace, according to data compiled by Bloomberg. Buyout firms have led a record $367 billion of takeovers so far this year, almost double the $187 billion of deals announced in the same period a year earlier. ``You are seeing mergers and acquisitions tittle tattle that makes me concerned,'' Bolton said. ``I can't tell you when it's coming but I can tell you the precursors are there'' for a stock market slump. As a result, Bolton said he has taken out short positions in the 3.2 billion pound ($6.3 billion) U.K. Special Situations Fund, which means he's betting on the declines of some shares. ``My views are based on behavior and sentiment,'' Bolton said. ``You can draw conclusions about what I am doing.'' Bolton also said last night he'd picked Sanjeev Shah to take over the Special Situations Fund, as he's stepping down from overseeing funds directly. Bolton, Fidelity's first fund manager in Europe, has previously anticipated stock-market declines. The 57-year-old dumped his holdings of telecommunications stocks, including Vodafone Group Plc, in the first quarter of 2000 at the height of the bull market for technology shares. Vodafone, the world's biggest mobile-phone company, fell 80 percent between March 2000 and August 2002. Bolton's closed-end Special Values Plc fund in March last year bought options to provide protection in the event of a drop in stock markets and also reduced borrowing in the fund to cut back on the risk of shares falling. Between April 21 and June 14 last year the U.K.'s FTSE 100 Index fell 10 percent.