Stocks may be in a bull market correction
The economy is still doing well and stock values are reasonable, Blackstone's Byron Wien says.
Making his case for why the bull market in stocks is not over yet, Byron Wien, the vice chairman of Blackstone Advisory Partners, told CNBC on Wednesday that the fundamentals are sound but that investors have become too complacent.
"The economy is doing well, . . . (and) the valuations are reasonable. So I think this is a correction in an ongoing bull market," Wien said in a "Squawk Box" interview.
U.S. stock futures were lower in early trading as concerns about Russia massing troops along the Ukrainian border continued to roil the markets after Tuesday's triple-digit drop in the Dow Jones Industrial Average ($INDU).
But even with the rough patch for the market, stocks are not even close to official correction territory -- defined by a 10 percent decline from record highs.
Wednesday, the Dow was only off 4.1 percent from its intraday high on July 17 of 17,151. The Standard & Poor's 500 Index ($INX) was off 3.52 percent from its intraday high of 1,991 on July 24, while the Nasdaq Composite Index ($COMPX) was down 2.8 percent from its intraday high of 4,485 on July 3.
"There was too much optimism," Wien argued. "When everybody is feeling complacent and comfortable, . . . the market is vulnerable. And there's enough geopolitical influence to precipitate that."
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By Steve Scherer and James Mackenzie
Like his type would say anything else. These parasites will say anything and everything to get folks into stocks regardless of the actual economy. They basically lack morals.
"The economy is still doing well and stock values are reasonable"
No comment other than two words: Market.........shill
There's a part of me that wants to agree with some of you who think that big time investors prey on the little guy by inflating values just to pull the rug out from under, however, consider this:
1. The '08 recession taught us that the U.S. is still one of the best places to invest your money. Did big investors pull out of the market? Some did. What happened? It all flooded right back in once everyone cleaned their underwear! I admit the little guy who tried to save 50% of his retirement fund by pulling out made a big mistake but that's his/her mistake, not the fault of big investors. My mother and father were very worried being retirement age and understandably so but my advice to them was don't overreact, it'll be back, they've now seen almost a full recovery and took advantage of the market when it was down making them better off in the long run. Sometimes it's not always a bad thing. Laws of nature apply to everything and the stock market is no exception, sometimes a few trees need to burn down to save the forest and many times it makes everything stronger/healthier in the end.
2. There's nothing people with a lot of money like more than making more money, to do so means investing and re-investing. Besides it's not in their or your best interest to cut-and-run with their money. Let's say you made $20k on a $2k investment from 1930-1950, then ran with your money and stuffed it in a mattress, what would you have today? $20k. Using the average inflation rate of 3.64% from 1950-2014, $20k is worth almost $200k in 2014. The reality is, smart investment would have made you a whole lot more than that. I'm not a Buffet disciple but he is right when he says the best time to sell is never.
3. Real investors put their money into well-run businesses, and they won't abandon a good investment, in fact, they'll buy more when everyone else is freakin' out, your fault, not theirs. You are an absolute sucker if you invest in company because some guy told a guy you know to invest in a certain company. Don't throw darts in the dark at companies you know nothing about, do your own research and simply watch the overall trends in society. Did you need to know about Microsoft back in the 80's or did you need to know the digital age was coming? That's not seeing the future people, that's just understanding where society is headed and there are signs everywhere.
4. It's nobody's fault but yours if you decide to sit on the sidelines, just know that your money is only going to be worth what it's worth today, which means it'll be worth a whole lot less 20 years from now.
THE ANSWER TO ALL OUR FINANCIAL PROBLEMS IS TO STOP THE GREGIOUS TAX EVASION BY CORPORATIONS, GETTING AWAY WITH AVOIDING TAXES TO THE GENERAL FUND.
REPUBLICANS NEED TO STOP THIS PRACTICE IMMEDIATELY.
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Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
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