![]() "They are expensive relative to the rest of the market where earnings estimates are probably too high. They are never cheap going into a bear market," Suzuki said. ![]() For instance, equity prices contain a rational bubble if investors are paying more for. "If you go back and look at all of the bear markets over the last 20 to 30 years, look at the starting point valuations for defensive stocks. There exist a large number of papers trying to detect rational bubbles. Suzuki acknowledges investors are paying a premium for safer trades. ![]() "The further that the economy continues to slow, you probably want to switch the concentration of that barbell away from the inflation beneficiaries and toward more of the defensive names." "Most of the inflation beneficiaries tend to come with a lot of cyclicality," he said. He lists defensive stocks, which include consumer staples, on the other side. On one end, he likes stocks which typically benefit in an inflationary environment, particularly energy, materials and financials. To weather a potential crash, Suzuki is taking a barbell approach. Yet, Suzuki is staying invested in stocks. That doesn’t (necessarily) mean they’re headed for a crash. Personal Loans for 670 Credit Score or Lower Markets The Intelligent Investor The Trouble With a Stock-Market Bubble Stocks have rarely been this expensive. The bears are inevitably too early, and by the time the market rolls over, the vast majority have given up. Personal Loans for 580 Credit Score or Lower The ugly truth about bubbles is that both the bears and the bulls end up losing. Best Debt Consolidation Loans for Bad Credit
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