Courtesy of Sajal at Fundamental Insights and Ideas
With an almost ~40% equity markets rally behind us, this bull market may still have some upside left. The bears sure got caught flat footed on this one. It’s always interesting to collate responses from different strategists. I find that recurrent themes makes it easier to filter out the noise. (Consider this to be similar to the “most widely held” consensus stock portfolio. Only in this case we’re trying to divine the “most widely held” very-smart money strategy. )
I’ve written two other recent commentaries which can be found here and here. Together, they represent a nice summary of current very-smart money opinion.
Well, the consensus seems to:
- Favor gold. We already knew that several prominent funds like Paulson Funds and Greenlight Capital have recently taken huge positions in gold.
- Bearish strategists still point to the suspect technical nature of this rally, and sound as adamant as ever. Probably a little too wedded to their ideas.
- A currency crisis with dollar devaluation looks imminent
- Even the bears think the highs in this rally may be ahead of us
- 930-950 on the S&P500 represents overhead resistance. If we clear it, this bull has a lot further to go. If we don’t, it’s a bear market rally.
- One common thread running through a few commentaries focuses on a three cycle picture: a correction in May, another big rally into June-July, and then another really deep correction, possibly taking us to new lows (depending on how bearish the strategist is).
- Some well respected economists have chimed in on how the current rally on green shoots euphoria sounds suspect.
So it definitely looks like the rally is long in the tooth. Let’s see what the very-smart money has to say:
Jim Rogers : The stock market may hit new lows this year or the next as the current rally has been largely caused by the money printed by central banks and fundamental problems remain unsolved I’m not buying shares if that’s what you mean. Not at all. The bottom will probably come later this year, next year, who knows when. Governments have not solved the essential problems that caused the crisis but instead they “flooded the world with money”. Trying to solve the…
