Barton Biggs at Traxis Partners believes that equities could be setting up for āthe mother of all bear market rallies.ā
The piece, written Nov. 24 by Barton Biggs for the Financial Times, is timely - Here are some excerpts:
... there is compelling evidence that investors, hedge funds, pension and mutual funds, and the public are not just talking bearish, they have raised astounding amounts of cash.
... Iāve never seen capitulation and despair like this. We must be pretty close to maximum bearishness.
... Second, valuations are cheap. Thereās no point in going into an elaborate dissertation; itās an inexact science.
... If emerging market equities, where the growth is, at six to eight times earnings are not cheap I donāt know what is.
... History shows that even in enduring, secular bear markets there are not just 20 per cent bounces but usually one 30 to 50 per cent rally. We should be due.
... I would like to see the credit markets unclog and spreads come in more. At the bottom of a panic, the news doesnāt have to be good for stocks to rally, it just has to be less bad than what has already been discounted.
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