Stocks have been on a tear recently, with major market indices hitting record highs last week.
But star real estate investor Sam Zell, chairman of Equity Group Investments, warns that the gains have probably gone too far.
"The stock market is at an all-time high, but economic activity is not at an all-time high," he told
CNBC. "People have no place else to put their money, and the stock market is getting more than its share. It's very likely that something has to give here."
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The S&P 500 index has tripled since March 2009, closing at 2,002.28 Tuesday. While the economy expanded 4.2 percent in the second quarter, growth has averaged only about 2.2 percent since the recession ended in 2009.
"Almost every company that's missed has missed on the revenue side, which is a reflection that there's a demand issue," he explained. "When you got a demand issue it's hard to imagine the stock market at an all-time high."
Military conflicts in the Mideast and Ukraine could put a dent into stocks, Zell noted. "I don't remember any time in my career where there have been as many wildcards floating out there that have the potential to be very significant and alter people's thinking."
James Paulsen, chief investment strategist at Wells Capital Management, also says a correction may be coming for stocks. "I am a little worried," he told
The Wall Street Journal.
Stocks may plummet 15 percent before the end of the year, he predicted. Paulsen recommends foreign stocks for their more attractive valuations.
To be sure, the five-year old bull market may only be half over, he noted. "But bull markets aren't typically straight-line events."
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