If you’re not banking on a double-dip recession and yet you’re out of the stock market, you better know you’re taking a huge risk
Just check out this graph from Wells Capital:
Poor quality graph. High quality opportunity
No wonder US value investing legend Bill Miller smells a big opportunity:
U.S. large capitalization stocks represent a once in a lifetime opportunity in my opinion to buy the best quality companies in the world at bargain prices. The last time they were this cheap relative to bonds was 1951. I was 1 year old then, but did not have then sufficient sentience or capital to invest. I do now, and if you are reading this, so do you.
One day this anomaly is going to be resolved. I’m not saying “buy buy buy!” but rather that you’d better have a good reason why you don’t.
(Source: Fool US)
{ 2 comments… read them below or add one }
My bet is the “path of meh” down the middle where it turns out those forward earnings estimates are rather optimistic and/or rather unsustainable *and* bonds are currently waaaay overpriced.
Hmm, that’s looking a reasonable call Lemondy. That said, I do think there could be a ratcheting effect if US unemployment does finally start to fall significantly. Not only will consumption rise, but confidence will, too.
I don’t mind saying I didn’t at all see this bond rally resuming in 2010. Quite the opposite, in fact.
Pesky Greeks!