Welcome to the Vitus Capital Blog!
Notes to myself, possibly of interest to others.
-- Bill Northlich

Friday, February 8, 2013

Vitus turning tentavely bullish on stocks

Kevin Lane: Majority market opinion is calling for a correction or using the industry’s most over used term, “overbought.” The current street banter seems to center on the theme equities are overbought, speculation is rampant and it’s a stock love fest. However, our experience is that we have never seen a significant correction when everyone is talking about how “overbought” the market is or how stocks are way “too extended.” We find it hard to believe that after hiding under a rock for nearly five years, that a few months of equity inflows means investors have gone from petrified to exuberant. That process in our opinion is a longer arc, not a singular event. While clearly markets can and will have pullbacks. We think the overbought chatter comes from many investors rationalizing aloud why they are under-invested.

Also, see this. Note the chart. At Vitus, we think this is a persuasive chart.  (However, note the log scale).

Qualification: We are guaranteed to have several vary gut-wrenching pullbacks in the medium term (over the next three years).

No comments:

Post a Comment