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(Shanghai, editor Zhou Ling) News , Wall Street shorts, founder of investment research firm Rosenberg Research (David Rosenberg) warned investors that the current US stocks and Bitcoin are huge bubbles.
Bitcoin’s recent gains have been very fierce. Since breaking the US$20,000 mark, it has been almost in a rush, breaking through US$34,000 in just a few days, the first time in history. Bitcoin rose by 305% last year, setting its best annual performance since 2017.
“I want to say that Bitcoin’s parabolic trend in such a short period of time is extremely abnormal for any securities,” Rosenberg said in an interview with the media recently, and he believes this is currently the largest market. Bubble .
In addition, he also believes that, in the context of the economic downturn, the outside world is too crowded with US stocks.
“According to our (stock market) evaluation work, based on a series of different indicators, our (US) stock market is overvalued by 20% to 30% ,” Rosenberg said.
Rosenborg served as the chief economist of Merrill Lynch in North America from 2002 to 2009 and has been known for his pessimism in the past few years. He told investors in 2019 that the US economic recession is almost inevitable.
However, in the spring of 2020, he played down his negative views on the market-claiming that he does not hate stocks, because the Fed’s unprecedented support may continue for several years (the market). Rosenberg believes that the key now is to remain vigilant.
The U.S. stock bubble may not burst in the short term
“The basic factor for maintaining economic growth is zero interest rates. As long as interest rates remain at their current levels, unless our economic activities experience a real and substantial fall, the bubble we are in may not burst in the short term,” he said, “( But) we must be clear that we are investing in bubbles.”
The S&P 500 Index and the Dow Index closed at historical highs last Thursday, rising 16.3% and 7.3% respectively in the past year; the Nasdaq, which is dominated by technology stocks, set its best year since 2009 last year—increasing nearly 44%.
In the next 12 months, Rosenberg plans to avoid last year’s star stocks. His main allocation strategy includes relatively underperforming utility stocks and energy stocks.
“In the context of the stock market bubble, what I actually want to do is to invest in those areas where there is no bubble and there is great potential for catching up.” He said, “They do exist.”
In addition, Rosenberg is also optimistic about gold, which he believes is a safe asset . Gold’s performance last year was also its best in 10 years.
“Its volatility is only one-fifth of Bitcoin,” Rosenberg said. “I have always been very optimistic about gold, and I am still optimistic about gold.”