Tags: Altucher | stock | supply | demand

James Altucher: 'I Wouldn't Be a Buyer of the Stock Market'

Friday, 10 May 2013 08:10 AM

By Dan Weil

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Financial commentator James Altucher, who has been "bullish forever," on stocks in his own description, has had a slight change of heart.

"Now is the time to take the pedal off on stocks," he tells Yahoo.

The market, which is hitting record highs on a daily basis, isn't going to collapse, because the economy is fine, Altucher says. And eventually stocks are headed higher, he maintains.

Editor's Note:
Billionaires Dump Stocks. Prepare for the Unthinkable.

"I don't see the market shooting up like it's been doing. It's going to level off and now you have to pick your favorite stocks."

The market is essentially being dictated by supply and demand now, as Altucher sees it. And "with demand not quite there and supply starting to go up, [stock] prices are either going to stay flat or go down, so I wouldn't be a buyer of the stock market."

As for supply of stocks, it had been shrinking steadily for the last few years because of share buybacks and a lack of initial public offerings (IPOs), Altucher explains.

But now, "supply will start to level off or go up as IPOs start to come back and share buybacks slow down because the market starts to get higher."

As for demand, it's suffering as "people still think a recession is going on," Altucher notes.

"Go long small cap stocks that don't have the high-frequency traders in them or the big hedge funds in them. Try to stay out of the way of the big guns who are basically criminally manipulating the market," he advises.

Not everyone shares Altucher's caution.

"We don't think people are giving enough credit to the strength of the economy," Ryan Detrick, a senior technical strategist at Schaeffer's Investment Research, tells The Associated Press. "We still like the market."

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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