Don’t be fooled by some analysts
July 11, 2019 Our outlook remains the same; we do expect a “bear market” which has been avoided for several years by near zero interest rates and central bank engineered stock market buying. Many stocks have already commenced a bear market. Keep in mind that buybacks now have totaled over $5 trillion which has added enormous support to the stock market. In the past, bear markets and normal periods of stock market consolidation occurred cyclically allowing investors superb opportunities to invest while specific stocks were cheap or actually “on sale.” Notice that when stocks are undervalued and overlooked, the major brokerages fail to recommend them in a timely manner? Never fails! The “revered” large American brokerage houses cannot afford to see periods of low volume or bear markets as they cause their profits generally to plunge. A Quebec based institutional money manager recently said to me that when specific stocks are often ludicrously overvalued, they remain strong “buys” by the brokerage analysts. The brolerages must keep their meters running to carry the salary expenses of the incompetent and inaccurate analysts. Yet, we are usually near fully invested in many underperforming and undervalued stocks. Scandal? What few investors and people in the media are aware of is that if a broker or money manager is at a major American brokerage house, he or she is not permitted to research and choose his or her own stock recommendations for clients. They are restricted to recommending stocks that are covered by their own […]
