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United Advisors Chief Market Strategist Scott Martin and University of Maryland Economist Peter Morici on the markets.
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This is outrageous to our stocks -- sucker bet no of course not but.
Are they gonna continue to go up.
With the market nearing an all time high corporate profits at record levels there are still some critics out there who say the game is rigged against individual investors.
Joining me now a debate Scott Martin chief market strategist the united investors appear -- C.
Professor at the University of Maryland -- to start with you.
I -- column this morning and I was intrigued by the numbers you put out on how.
Earnings and stock prices well there are no longer related to each other.
Well apparently they're not -- over the last thirteen years earnings are up about a 135%.
You know corporate profits as measured in the GDP accounts.
But get stock prices have been essentially flat.
They crossed -- 15100.
Line at the S&P.
First in 2000 and here we are thirteen years later and they're crossing them once again.
-- nothing -- and the expectation is that as earnings growth stock prices will rise to sky here big bully allowed -- -- explained that's.
Algeria may not get their lies damn lies and statistics driving if you take certain periods yes you can bear that out now thirteen is your number -- of my friend.
I agree Jerry but you mentioned something in the previous segment -- the outlook 2000 -- just what happened after 2002 of the market rocketed up sending -- 09 earnings her really well over that period -- there is a little bit of a correlation there are stocks -- guess what since 2000 that are up that magic daughter inherited by presents a lot.
I think you gotta be careful I think you gotta be nimble but listen -- -- -- situation doesn't always work that -- well.
I I hate to hear that because.
That's really the only game that individual investors can play -- -- you look at people who are just one had no way a little bit of money each week out of their paycheck into the air 401K.
And there are only hope billion -- that they really have over the pros is that they can stay put they can stay steady is that just a sucker back now.
Well it has been for the last thirteen years.
-- you know indexing is what economists recommended but you know you don't we go further back in time.
Look at when the S&P first crossed a thousand in 1998.
Now all over this period over fifteen years.
-- where valuations were closest to what they are now.
Profits are up a hundred of 40%.
Stocks are up 50% the question is where is it all going.
And why don't profits drive stock prices anymore and maybe some -- -- -- -- pulled out by private equity and all the rest got.
Now.
It's going overseas -- say that's the bank and look at the S&P 500 it's not just US companies anymore fact.
-- if you look at high profit cut four percentage of what the companies make.
Have big goes overseas -- is from overseas companies so you have to look at the fact that customers overseas are buying stuff from RS and.
Our Esterline Britain Canada only the second any issue -- that Peter -- an up here.
Because you can -- international companies by living United States GM is an emerging markets ETF.
EF -- is Europe Far East Australasian desert you areas that investors can buy -- that would go -- -- they have below thirteen you know until now here.
That's the real problem -- investors like you and I and I have investments in places like that.
You know can find those stocks and we have very large portfolios for the ordinary guy that puts 2000 dollars a year and desire.
He's not gonna find those and that's the big problem and it's a basic breakdown in capitalism because it causes -- people to lose faith in our system.
-- I think that's well but.
Got to -- it's an uneven playing field right I mean for day here -- -- -- the high frequency traders in Jersey are running the show.
Movie is connected the fundamentalists anymore certainly not stock prices.
Now I -- in.
Again if you take over a certain period you can point two -- -- each other where does it I love you bought a big -- -- you.
You always say this but I'll tell you this here's the deal if somebody is sitting at home -- trying to pick off.
Pennies in stocks right like trading Amazon for just pennies a day yet you got a problem that's not a good day and the -- people should know that.
Harry -- -- last word here.
Well I think that.
Folks that are within ten years of retirement -- -- they need to keep a healthy -- in cash.
But you know if you're further out you're 3540.
Years old.
I think putting a significant amount in the market hoping that it does resolve itself over time is important.
But I think also real estate investments are looking for other ways -- ask anyway enemy has become much more important that I was in the nine vol.
-- -- Peter thanks for coming on always great to have you guys on the show Peter great analysis interesting numbers thank you.
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