Taps Coogan – December 21st, 2020
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Dr. Ed Yardeni, creator of the highly informative Yardeni Research, has the distinction of having been a long-term equity bull since the fallout of the Global Financial Crisis.
Although Dr. Yardeni still maintains a bullish outlook for 2021, he is starting to sound more qualified, warning of signs of excessive speculation, as the following interview with Yahoo Finance details.
Dr. Yardeni notes:
“I often get asked these days, what would I do if I had a lot of cash and I hadn’t been in the market and… I don’t really have an answer… I would stay with the positions that one might have added in the recent years but right now there is just way too much bullishness. Everybody’s bullish. We have signs of speculative excess with Tesla and with some of these IPOs. We already had our Santa Claus rally. It just happened in November… Don’t speculate too much…”
Nonetheless, he remains bullish as we get into the second half of 2021:
“The outlook is actually pretty good for next year once we get through this pandemic… We should see the economy doing very well in the second half of next year and going into 2022. That’s what the market has been discounting…”
We haven’t had a recession since at least the 1950s that wasn’t immediately preceded by a significant Federal Reserve rate hiking cycle. The Fed is promising to not even think about raising interest rates for a very long time. As everyone knows by now, speculative bubbles can last longer than expected. Valuation metrics are already rivaling the Dot-Com era and 1929. Will this become the biggest financial bubble in modern history? Is it already?
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