 |
|
| View previous topic :: View next topic |
| Author |
Barron's Round Table |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11722
Location: Los Angeles, California
|
 Posted: Sat Jan 12, 2008 11:58 am Post subject: Barron's Round Table |
 |
|
2008 Barron's Round Table - a lot of pessimism all around. From a contrarian standpoint, this is a good sign. In the 2007 roundtable, Bill Gross and Marc Faber were the only ones that "got it right" - calling for a dramatic slowdown.
http://online.barrons.com/article/SB120009586477785055.html?mod=b_hps_9_0001_b_this_weeks_magazine_home_top#
Gross is actually pretty bullish on the stock market this year - and that was predated on his view of no fiscal stimulus. Faber is also relatively bullish on the US stock market this year - although he says that the market can still go down.
| Quote: | Gross: The stock market's value is predicated on three things: the level of corporate profits, the volatility of those profits and the level of real interest rates. Mario dealt with that, though he didn't mention real rates. Although profits may be vulnerable and much more volatile now, the fact is real rates [adjusted for inflation] have come down from 2% to just barely above 1% on the five-year bond. Some say the 10-year is the basic monitor for stock prices, but 10-year yields are down substantially, too. Whether profits are lower or more volatile, they are discounted at a much lower rate. That adds to stocks' future potential value.
.....
Faber: Equity prices have increased in dollar terms, but in euros the S&P 500 is down about 45% from its peak in 2000 and the Nasdaq is down 60%. Measured in gold, the markets have done horribly and the economy has been in a recession for a long time. I'm not bullish about U.S. stocks, but everything is so bad on a global basis that they might do better on a relative basis. That doesn't mean they go up, but the U.S. market might go down less than China, India, Vietnam and some of the other markets that are in cuckoo land. These markets have gone up because people believe in decoupling. Economically we could see a decoupling, whereby the U.S. is in a recession and China still grows by 5% or 10%. The financial markets won't decouple. Unless, Mario, they reintroduce that uptick rule.
Five years ago I visited family offices and financial institutions that had practically no exposure to international stocks. Today the same people have 50% of their money in emerging markets. Valuations in these markets aren't compelling any more, except for real estate in emerging economies. |
|
|
| Back to top |
|
 |
| Author |
Barron's Round Table Replies |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11722
Location: Los Angeles, California
|
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
