Two of the most prominent bears on the markets will not short this market. Famed investor Jim Rogers and newsletter writer and Barrons participant Fred Hickey. The famed Jim Rogers predicts that the Fed’s printing presses could lead to the S & P 500 leaping to 50,000. Rogers considers this a real possibility and therefore will not stand in front of it. Fred Hickey the author of the tech newsletter, The High Tech Strategist, believes that the Fed’s policy of quantitative easing is acting as a shot gun shooting money all over the US financial system rather than in a targeted manner. This policy according to Hickey could cause the stock market to soar, so shorting it does not make sense at this point.
If exposure to equities is desired, these two pros are similar here as well. Both favor China since the country is running capital surpluses. Both Hickey and Rogers favor commodities as well. Rogers actually has said that people on Wall Street should become farmers as the agriculture boom is in its very early stages. Hickey likes Ag too but favors gold a bit more.
Now before the reader decides that both of these guys have lost their minds, I will mention that both have at times been spot on with their at-times outlandish predictions. Hickey correctly called the Nasdaq bubble and the housing collapse a few years later. Rogers was the partner of George Soros before striking out on his own. He has called the Chinese boom correctly as well as the recent agriculture boom and has an impressive record.
On the other side, both of these pros have at times been wrong. Rogers I think in the 1990s said that the US Treasury bond yield would not ever go below a certain level (which it easily blew by). And Hickey, although was eventually correct about the Nasdaq bubble, was extremely early calling for the collapse as the Nasdaq went up for years before eventually collapsing.
Still, both of these market pros have gotten it more right over the years than not. They both have survived and at times thrived through many types of market cycles over many years. Rogers has to have made a fortune over the years and I imagine that Hickey has made a good penny in the markets too. In my view, they are worth listening to at least for a different point of view. Both are not afraid to speak their minds and offer what some may consider outlandish scenarios. If two of the market’s biggest bears will not short this market for fear of the Fed’s printing presses pushing the indices to obscene levels, then maybe both market participants and Fed members should think wisely before making their next moves.
Article written by Tom Henderson, Strategist JBH Capital.
Disclosures: There are no disclosures to make.