Source: Golden Ten Data
Is the valuation of US stocks “baffling”? Bezos, Buffett, and the Walton family are all shipping...
Paul Dietrich (Paul Dietrich), chief investment strategist at B. Riley Wealth, said that US stocks seem to be “inexplicably” overvalued, and there are indicators that the market is about to undergo a major adjustment.
In an interview, Dietrich pointed out that several indicators in the market collectively sent warning signals about the future of the stock market.
The price-earnings ratio of the S&P 500 Index (SPX) is showing a red light, and the price-earnings ratio has reached the level before the burst of the internet bubble.
Dietrich said, “Every indicator seems to tell us that we are in a historic bubble. It's hard to say we're not going to see major adjustments.” “Now is not the time to invest new capital into the market,” he warned.
Dietrich said that the most obvious sign that the market is about to face a correction is that “smart money” is withdrawing from the stock market and moving to safer cash equivalents.
He pointed out that billionaires such as Jeff Bezos (Jeff Bezos), Warren Buffett (Warren Buffett), and the Walton family (Walton family), the heirs of the Walmart (Walmart) empire, have recently sold stocks, indicating that large investors have smelled the smell of a pullback.
Dietrich said that although sell-offs by insiders or major shareholders are usually arranged in advance, this may also be a sign that they are worried that the market is nearing its peak.
Speaking about the stock market, he said, “What is certain is that it is inexplicably overvalued. We're now seeing savvy investors turning large amounts of money into cash... It's not that they don't trust their company, but they know that the company's stock is completely overvalued, and if they sell the stock now, they can buy it back at a cheaper price later.”
Dietrich said that it is currently unclear what factors will trigger the upcoming stock market adjustments. He pointed out that previous stock market crashes, such as those before the 2008 crisis, were all caused by the unpredictable “black swan incident.” He speculated that a sharp rise in oil prices due to geopolitical conflicts, or more regional banking problems caused by the commercial real estate industry, could cause the stock market to fall.
While most investors were still optimistic about the stock market and the economy, Dietrich became one of Wall Street's most pessimistic forecasters. Earlier, he had predicted that if the US economy experienced a slight recession, US stocks might plummet by 40%.
editor/tolk