31st Aug, 2016
Our proprietary metrics indicate that the US and Australian share markets are very expensive at present. Although we are confident of the sound statistical basis of our metrics, it is reassuring to know that we are in good company: in recent months several very successful global investors have warned that US equities are over-priced, or have stated very clearly that they have taken out portfolio protection. For example:
- Legendary hedge fund managers George Soros and Paul Tudor Jones have both increased their short positions on the S&P500.
- Carl Icahn said in June, “I don’t think you can have zero interest rates for much longer without having these bubbles explode on you.”
- In late July Jeff Gundlach, founder of DoubleLine, said, “Sell everything. Nothing here looks good.”
- Only this month Paul Singer, who manages USD$28 billion, warned that “the ultimate breakdown (or series of breakdowns) from this environment is likely to be surprising, sudden, intense, and large.”… [see more]