Hedge Fund Star Paul Singer: 'US Stock Market Frothy'

Tuesday, 05 Aug 2014 07:23 AM

By Dan Weil

  Comment  |
   Contact Us  |
|  A   A  
  Copy Shortlink
Many prominent financial market participants have warned that various markets are close to or in a bubble. You can add hedge fund star Paul Singer, CEO of Elliott Management, to the list.

"By all measures, the U.S. stock market is currently frothy," he wrote in a recent letter to investors obtained by CNBC.com.

Editor’s Note:
Retire 10 Years Earlier With These 4 Stocks

The S&P 500 index had a trailing price-earnings ratio of 19.5 at the end of last week, up from 18.6 a year ago, according to Birinyi Associates.

Singer maintains that central banks are creating asset bubbles with their massive easing programs.

"Investors are pushing out the risk curve and once again piling on leverage to juice returns, while short-term interest rates in Europe are actually negative," he said. "Although the levitation of financial assets has not yet spread to gold, we will grit our collective teeth on that score and await either 'asset price justice' or the 'end times,' whichever comes first."

Rising inflation may tear markets asunder, Singer said.

The end result may be "a scramble by citizens and investors to preserve value on a foundation of shifting sand, together with ... real class warfare."

Renowned mutual fund manager John Hussman, president of Hussman Financial Trust, is another bubble believer. "Make no mistake: this is an equity bubble, and a highly advanced one," he writes in his weekly market commentary.

"On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15 percent of the 2000 extreme."

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

Related Stories:

© 2014 Moneynews. All rights reserved.

  Comment  |
   Contact Us  |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Apple Issues Security Warning for ICloud

Tuesday, 21 Oct 2014 20:42 PM

Apple has posted a new security warning for users of its iCloud online storage service amid reports of a concerted effor . . .

MarketWatch's Hoak: Five Real Estate Traps for Retirees to Avoid

Tuesday, 21 Oct 2014 19:58 PM

MarketWatch personal finance editor Amy Hoak cites five common real-estate errors committed by retirees. . . .

Stocks Rally Most in Year Amid Earnings, ECB Outlook; Oil Gains

Tuesday, 21 Oct 2014 17:01 PM

U.S. stocks extended a rebound, with the Standard & Poor's 500 Index rallying the most in a year, as speculation grew th . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved