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-- what do you think would be the next major weigh station on this -- back about July 21 there was an article there was a paper in an in this paper.
It was a report by god himself masters of Bernstein global wealth management in this note he wrote the case for Dow 20000 he said number -- investors -- -- to risk adverse -- some of just given up on taking risk.
Stocks are absolutely better than bonds and number three the world is not going to end therefore he says the doubt will bring.
It -- all the way up to 20000.
And here is I've read this article in the New York Times -- that I read the paper and I thought to myself let's wait a little bit as we get closer certainly were about 141000 a thought bring -- Seth.
On this idea when you broke it where -- -- what was the response.
But -- -- postmark but certainly a lot of people were very risk averse and many people still are.
And we're seeking safety in bonds.
Many still are you know what's in custody clear is that stocks right now are just very reasonably valued very attractive things on and a lot of people probably should be looking at them.
OK that is a very calm assessment of slashing.
Rainbow lit sign that says -- 20000.
You know as we climb toward that what makes you believe in what's the time horizon -- you say between now and the end of the decade we should be hit it that's how do you know.
If you think about what stocks are worth it's a function of what companies -- And also -- -- people put on those earnings and the good news is that from our vantage point today we can say that there's a lot of reasons to think that.
Both of those I'm pretty healthy territory.
Earnings continue to grow and that's mostly function of the economy which is growing modestly not.
Boomer of an economy bit as we saw today the economy is still growing.
And that helps companies sell more which means that they can learn more profits and -- the valuations are reasonable to what.
Your estimate for the S&P 500 I tend to elect to look at the S&P as well because it's 500 stocks vs thirty names that we don't really know what's gonna happen.
Console is a for the S&P roughly I'd say that this year -- consensus is that it's gonna earn between a 105 I'm 110 dollars I think that's pretty reasonable the key thing though is.
He'll try grow another 6% next year and probably another 6% the year after that.
And that -- and a steady growth if you begins accumulated up and you just assume reasonable valuations.
Gets you to 20000 on the Dow in about five -- ten years Hamas.
I want our viewers to know -- isn't just another guy coming on as we get people always have let me come on I think Dow 30000.
You're at alliance first senior partner you went to Princeton and went to Oxford you speak fluent Mandarin -- -- -- you've talked in China you know the world.
If that is the case and your scenario -- true how should people be allocating their portfolios the traditional 6040.
Well it depends depends on exactly how much.
Risk you need to take to get the objectives that are pretty simply we want to make money.
Well then -- -- have a lot of money in stocks but the problem with that is you have to be willing to accept your portfolio will drop sometimes quite substantially the next time people get.
Perhaps rightly afraid about something -- we -- we have to balance the risk of losing money when the market trends -- for short periods of time -- making money over the long term to -- your objective.
Let's say I'm ready to be a member of the church of -- masters of sectors what are the best sector opportunities.
One -- first let them not to the most important thing to avoid is the stocks that were bought over the last years because they seemed safe.
And those are especially the higher yielding stocks.
They're yields have actually gotten.
Lowered because people bought so much of them -- -- avoid so I just don't -- for the dividend play exactly the good rep has gotten very overpriced effectively it's a form of a safety bubble would -- think of it this way within stocks.
And what you want with the disease that's available in many different sectors -- you want is everything else which is also available on many different sectors are you like.
Energy exploration you also believe in companies that have been scarred by the real estate backed -- Bubble popping exact go for those names and those -- are of -- -- because people thought there was -- -- -- -- they're not wrong.
But in fact in both cases there are a lot of things like so for example energy exploration is interest -- because we're seeing a boom in energy production in this country is gonna last for.
And the companies are well positioned there have lots of growth potential and on the real -- front -- was the cause of the 2008 problem.
Those companies got really trashed.
And some of the companies that are now participating in -- recovery are therefore very attractive value play itself.
I've been waiting for this interview and I am glad we did set masters says Dow 20000 by the end of the decade so people -- have some time to get it.
-- -- thank you very much and you good to see you set.
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