Cheapest Stocks in 20 Years Signal Bull Market as Economy Slows

Discussion in 'Stocks' started by biggerfish, Apr 2, 2007.

  1. Cheapest Stocks in 20 Years Signal Bull Market as Economy Slows
    By Michael Tsang, Daniel Hauck and Nick Baker

    April 2 (Bloomberg) -- The U.S. economy is slowing. Mortgage defaults are rising. And stocks are the cheapest in 20 years, a ``buy'' signal for some of the world's biggest money managers.

    BlackRock Inc., Fisher Investments Inc. and Schroders Plc, which manage about $1.4 trillion, say stocks are inexpensive relative to bonds. Profit of companies in the Standard & Poor's 500 Index, the benchmark for American equity, is growing faster than shares, and represents a yield of 6.53 percent compared with 4.65 percent for 10-year U.S. Treasury notes.

    The gap -- the widest since 1986, according to data compiled by Bloomberg -- is encouraging investors because earnings forecasts indicate the U.S. will keep growing, while bond yields show confidence that inflation will stay in check.

    ``I'm on the wildly optimistic side of things,'' said Kenneth Fisher, who oversees about $38 billion as chairman of Fisher Investments in Woodside, California. ``The economy is stronger than people think it is.''...
  2. "relative to bonds" though.
  3. john12


    lol these same turkeys were saying buy stock in 99 at 50 p/e's saying the business cycle would go on for decades.all these sucks want there cake and eat it too. so growth falls to 5% they say so what stocks cheap.bottom line complacency is incredible and a huge hit is coming
  4. dhpar


    when equity markets can't go down (as in the previous 5 weeks) then I do not mind being a bit long...