Bill Gates: Stocks More Attractive than Bonds

Tuesday, 07 May 2013 08:32 AM

By Dan Weil

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When you look to Microsoft Chairman Bill Gates for wisdom, it's usually about the technology industry.

But CNBC asked him his thoughts about the soaring stock market, and Gates wasn't at a loss for words. It's all about interest rates, he said.

"There is always the question of what's going to happen with interest rates. It has this fundamental effect on things," he explained.

Editor's Note:
Use This Single Loophole to Pay Zero Taxes in 2013

And the current rate structure is good for equities, Gates noted. "Certainly you could say that equities are a good deal relative to bonds at this point," he told CNBC.

"But if interest rates are going to go shooting up, you'd like to stay liquid. It's an overreaching figure people have to think about as they're investing now."

The 10-year Treasury yield stood at a three-week high of 1.77 percent Monday.

Gates also has thoughts about the competitive currency devaluations coursing through the world. "In terms of people simultaneously trying to stimulate their economies by having very low interest rates and weakening their currencies, this [era] is pretty unique," he said.

It's unfortunate for nations trying to reboot their economy that they can't weaken their currency much below others, Gates added.

As for interest rates, while they have risen since last Friday's jobs report, many experts doubt that will turn into a trend.

"One decent number aside, not much has changed, as the economy is still weak and the Fed is still buying," Brian Edmonds, head of interest rates at Cantor Fitzgerald, told Bloomberg.

Editor's Note: Use This Single Loophole to Pay Zero Taxes in 2013

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