In a wide ranging interview with The Motley Fool web site, Charles Schwab Chief Investment Strategist Liz Ann Sonders says she thinks a correction will hit the stock market in the near term. She’s optimistic on the economy, however, and says current equity valuations aren’t bad. “I’m actually probably a little more optimistic than the consensus about the economy, but I think the market has more things with which it’s going to have to contend this year,” Sonders said. “We’re seeing the market faced with not only pre-existing problems, but also some new problems. I think we’ll see more corrective […]
In his year-end letter, Jeremy Grantham says that equities are once again significantly overpriced, and that investors haven’t learned the lessons of recent market crashes. But, he adds, stocks will likely head higher in the short term. “All investors should brace for the chance that speculation will continue for longer than would have seemed remotely possible six months ago,” writes Grantham. ” I thought last April that themarket (S&P 500) would scoot up to 1000 to 1100 on a ypical relief rally. Now it seems likely to go through 1200 and possibly higher. The market, however, is worth only 850 […]
Hedge fund guru George Soros made a couple big statements Thursday, saying that China’s stock market is “overheating”, and that gold is becoming the “ultimate bubble”. “Right now, the Chinese market is overheating and they have to slow it down,” Soros said on Bloomberg Television. “It remains to be seen how successful they are.” As for gold, Soros says that low interest rates around the globe are creating an environment in which new bubbles have formed, according to the Telegraph of London. “When interest rates are low we have conditions for asset bubbles to develop, and they are developing at […]
David Herro, who was recently named one of Morningstar’s fund managers of the decade, says stocks are still cheap — especially compared to other asset classes. Herro says that during most downturns, his portfolios’ prices fall to about 50% of their underlying values. In the recent downturn, they fell to about 35%, he says, and after the recent rally, they’re trading in the mid-50% range — still near the levels typically seen in normal downturns. Also make sure to check out Herro’s explanation of how he goes about finding value in stocks.
For stocks, 2009 was one of the most eventful years ever. From the widespread fears of financial Armageddon that pounded the market at the beginning of the year, to the signs of “green shoots” of hope, to one of the strongest and swiftest market rallies in history, a myriad of factors caused stock prices — and investors’ emotions — to swing wildly. In the end, the market ended up well in the black, and our Validea.com guru-based models did even better. While the S&P 500 rose 23.5%, John Reese’s 12 individual guru-based 10-stock portfolios gained an average of 34% for […]