prudentinvestor

Market Valuation Signals from the 'Smart Money'

In the recent past, guesses by astute amateurs appear to have been as good as, or better than, the average pundit's. The average pundit has stocks to sell (after he or she bought them), or advice to sell as to which stock we should all buy, so this tends to slant the advice. The latter is not true of bearish hedge funds, but they are a minority, and have their own agenda to sell. This means that independent investors have to rely on their own judgment.

If you look objectively, you will see unsound economic fundamentals that have resulted from decades of market distortion by the fed, with no end in sight. Not only are we failing to remedy the past distortions, but even implementing new and more egregious ones with bailouts, ZIRP, QE, and so on.

Thus, it is hard for this independent investor to believe that the economy and hence the market are going to advance significantly this year. While I am not predicting doom and collapse, I cannot see how we can have the strong rebound that many pundits are now predicting as eminent.