George Seay, Founder and Chairman of Annandale Capital, discusses whether or not the market is too hot right now.
Transcript:
Caroline Woods: You talked about the stock market being priced for perfection at the top of this interview. I’m curious about how you’re approaching the market right now, given the impressive run up that we’ve seen.
George Seay: Well, I think it’s a very interesting time when you look at millennials and Gen Z, young professionals who’ve been in the market for anywhere from 15 down to very few years. They didn’t live through the Great Recession and they didn’t live through the tech bubble. And unfortunately, I’m old enough to have started my company right before the tech bubble popped. And I remember that market extremely well. And luckily, I’m more of a GARP investor, so we lost about half as much money as the market did during that tech bubble popping, but everybody lost money during that period of time. It was a two year, horrible, grinding bear market, and this market is eerily reminiscent of that. It’s not as extreme as it was back then. But at the same time value stocks and GARP stocks are much pricier than they were in 2000. It’s only the tech bubble stocks that are not quite as expensive as they were back then, but they’re still wildly expensive relative to historical measures. And it’s just hard to get excited about making double digit returns every year for the next three or four years, as long as prices are this high. Now, having said that, there’s more margin out there than has ever been in history. And there’s been quite a bit of short selling related on these high prices. So speculation is everywhere. But just because the market’s expensive doesn’t mean it’s about to go down. It can stay expensive a lot longer than you can stay solvent if you’re investing on margin. So it’s a great time to be careful on both ends, the bullish end and the bearish end.
Subscribe |
Earn. Live. Invest. |
TheStreet Pro |
#Investing #Stocks #WallStreet
source
