Tags: Doll | bubble | stock | market

Bob Doll: Why It's Not a Stock Market Bubble

Wednesday, 04 Dec 2013 09:59 AM

By Kristin Caliendo

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While there has been talk for months of a stock market bubble, Bob Doll, chief equity strategist at Nuveen Asset management, doesn't think we're in one right now.

"A bubble consists of . . . overvaluation, overownership and overleverage, and I don't think we have any of those three in the equity market," he told CNBC.

"The bubble talk's been going on now a couple of months, and the market's up eight weeks in a row, right in the face of those who've used the word 'bubble.' "

Editor’s Note:
5 Reasons Stocks Will Collapse . . .

Doll explained that a bubble means there will be a 40 or 50 percent drop if it bursts.

"I think the probability of that is very low," he noted, adding that that doesn't mean there won't be some pullbacks.

Although it might be too late to get in the game this year, Doll argued, predictions are pointing to strong performance in 2014 as a result of added economic and earnings growth both globally and in the United States.

For next year, Doll said, "I want to lean into the cyclicals a little bit more — some industrial stocks, selected technology. I wouldn't give up on select consumer names, as well, leading into that somewhat better economic growth."

Nobel Prize winning economist Robert Shiller disagrees and believes that stocks are in a bubble.

He told Der Spiegel magazine that because of the steep rise in equity and property prices things "could end badly," Reuters reported. 

Shiller thinks the U.S. economy is weak and vulnerable still and sees the financial and technology sectors as overvalued.

"Bubbles look like this. And the world is still very vulnerable to a bubble," he said.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

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