Tags: Fleckenstein | stocks | absurd | valuations

Bill Fleckenstein: Stocks at 'Absurd Valuations'

By    |   Wednesday, 26 March 2014 12:45 PM

Stocks have reached vastly overvalued levels thanks to the Federal Reserve's massive easing program, says Bill Fleckenstein, president of Fleckenstein Capital.

"There can be no debate about absurd valuations," he told CNBC.

"And you can't use zero percent interest rates as a justification, because the only reason rates are at zero percent is because of the same Fed that has caused the stock market to be infected with lunacy again."

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The Federal Reserve has a zero to 0.25 percent target for the federal funds rate.

To be sure, Fleckenstein isn't predicting an imminent collapse in stocks.

"When you get to a place where groups of securities can get wildly overvalued, usually that continues until they exhaust themselves, or until some monetary phenomenon upsets the apple cart," he said.

So Fleckenstein's not ready to short stocks yet. "If you want to take a speculative shot, it might make sense to short an index or something like that," he said.

"In terms of wanting to be short for more of an investment standpoint, I really need more things to go on for me to really want to dig in and think it was safe."

Some others have at least a slightly more positive view of the market than Fleckenstein.

"Things don’t look spectacular here, but they look OK," Curtis Holden, senior investment officer at Tanglewood Wealth Management, told Bloomberg.

"The U.S. economy seemed to have cooled off from the pace it’s on toward the end of last year. There may be a little relief recently that things may be stable here."

Editor’s Note: Free Video — ‘Rogue Calendar’ Could Turn 490% Profits

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Stocks have reached vastly overvalued levels thanks to the Federal Reserve's massive easing program, says Bill Fleckenstein, president of Fleckenstein Capital.
Fleckenstein,stocks,absurd,valuations
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2014-45-26
Wednesday, 26 March 2014 12:45 PM
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