Investment guru Jim Rogers believes the stock market’s recent gains won’t last because the U.S. economy remains mired in crisis.
But he says the massive fiscal and monetary stimulus campaigns engineered by the government and Federal Reserve could cause a huge run-up for the stock market first.
“It's a bear market rally. I was going to say I don't think the S&P 500 will see new highs,” Rogers tells The Economic Times of India.
“But I have to quickly temper that by saying against the dollar because the S&P 500 could triple from here if they print enough money and the value of U.S. dollar collapses. Then the S&P could go to 50,000, Dow Jones can go to 1 million.”
Rogers was probably joking. The Standard & Poor’s 500 Index now stands at 925, and the Dow Jones Industrial Average at 8,625.
But you get the idea.
The possibility of a massive bull market “is one reason why I am not shorting stocks right now,” Rogers says.
The star investor remains bullish on commodities, so much so that he says money managers who feel confused should consider switching professions. “Become a farmer,” Rogers suggests.
Rogers isn’t the only expert who believes stocks will ultimately fall.
Ace economist Robert Shiller tells the Financial Times that stocks look fine on a price-earnings basis.
“However, we can move beyond that. I’m thinking that unfortunately the world economic situation is precarious now, and I’m worried about this recession,” he says.
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