Analytics
The best Experts' Views, Marks and Forecasts on Economics >>
-
22 August 2011
Don’t Buy Stocks Until Everyone Turns Bearish: Bleier
finance.yahoo.com While the market can't decide which way it's headed from one hour to the next, Scott Bleier founder of Create Capital Advisors is anything but wishy-washy when it comes to investing. In his bold, unwavering style Bleier returned to Breakout for a victory lap of sorts. After calling an end of the bull market in early June, we invited Bleier back to discuss the current environment and where investors should hide out until the storm passes.
His advice is 3-fold:
1) Stop chasing things like gold
2) Wait for the right moment, it will come
3) Don't do what everybody else is doing
"The problem is that everybody is doing the same thing," he says. Take gold for example. It's up $400 an ounce since July 1st and more than 50% in the past year. Many feel it has already gotten too expensive, but they've been proven wrong over and over again. Bleier acknowledges the move but refuses to chase it. "Metals are the momentum trade right now, the trader's dream, and they are going to bag you if you chase them."
Instead of piling in to gold, Bleier recommends getting ready to buy some high yielding stocks or preferred stocks, but just not yet. Right now investors are piling into utilities, MLPs, and seeking out yield. But "you've got to wait for this volatility to play out," he says, adding that we'll see a lot more ups and downs before things smooth out.
"You've got to wait for that final moment of fear," Bleier says. "There's still a lot of people trying to buy the dips, to buy the bounce. That's all got to go away."
As he sees it, the high yielding trade will be the last to sell off and the first to bounce back since there is not any meaningful dividend alternative. He calls this entire era of Fed easing and intervention "a phase of insanity" and thinks it should and will come to an end.
Bleier says "enough of the props. Let markets do what they will. Enough of the Fed interjecting funds. Enough of buybacks. Let the realistic market go to where it should based on realistic fundamentals." This is not a fear-based market; in Bleier's view it is a market adjusting to reality. And the investment opportunity will be plentiful once the adjustment phase passes.
