Posted on 09/03/2014 5:36:27 AM PDT by Citizen Zed
Billionaire Sam Zell told CNBC on Wednesday he believes a correction in the stock market could be on the horizon.
"The stock market is at an all-time, but economic activity is not at an all-time," the chairman of Equity Group Investments said in a " Squawk Box " interview. "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."
Zell also expressed concern about tensions in many parts of the world, including the threats posed by the Islamic State militant group, the Ukraine-Russia standoff and Gaza.
"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," he said. "If there's a change in confidence or some international event that changes the dynamics, people could in effect take a different position with reference to the market."
With those concerns as a backdrop, Zell said he's being very cautious about adding to stock positions and trimming where it makes sense.
He lamented about how difficult it is to call a market top. "If you're wrong on when, that's a problem." His answer: "You got to tiptoe ... and find the right balance."
Zell added, "This is the first time I ever remember where having cash isn't such a terrible thing despite the fact that interest rates are as low as they are."
(Excerpt) Read more at mob.cnbc.com ...
Anyone want to do the math on the rotational speed of a planet with a horizon that takes 4 years to show the sun? A "correction" has been "on the horizon" for a while now. I'm not downplaying this, don't get me wrong, but it's just constant fear now.
I’ll worry when I see Zell unload his stock holdings...
Do you think we will get a heads up on that?
“Constant” being the key word here! Makes me wonder.
The problem is that those of us just sitting on a 401(k) really have no recourse when this correction does come. The tax hit is so monumental as to be stupid to do.
How is Sam’s newspaper investment doing ?
let me check my crystal ball, ask my Ouija board, what an idiot
I once saw a guy wearing a sandwich board saying “THE WORLD WILL END TOMORROW!”
Same thing as Zell is saying.
The only reason the stock market is charting record territory is because they have been pumping 85 billion dollars a month into it for years. It's a mathematical certainty that a major correction is coming.
The longer the delay, the bigger the crash is going to be.
And it's already going to be epic.
I don’t know.
I keep hearing about a correction. From 1995 to now the stock market is up 8% annually. Some years more and some years less... but over time... its returned 8% annually.
DJIA was 3885.58 on September 2, 1994. Closed yesterday at 17,067.56. That’s a 20 year CAGR of 7.68% so round to 8% and that’s your number.
I’ve been laughing at all the people who pulled out after 2008, thus insuring their losses. I’ve made a killing since that correction. I’ve taken half and gone conservative, the other half aggressive. I’m not worried.
You meant to say "The Fed", didn't you? lol
Near zero interest rates are what's propping up this market.
Yep.... Everyone talks about this terrible correction coming up. I’m just asking is 7.68 CAGR way out of line?
http://www.cnbc.com/id/101963920
He’s got company. Howard Marks is (in my book anyhow) more respectable than Zell. The utilities call by Marks is intriguing, in that utilities are usually a defensive play that attract investment during a recession, particularly one in a low interest rate environment. The other three I get. On the other hand, the SP Utes have done 8.33% annual return over the past five years, one of the better performing sectors.
A lot of this is probably hocus-pocus talk, based on the September performance of the market, and the fact that statistically the US economy enters a recession once every six years. So the stats guys are trumpeting a seasonal (September) factor converging with a cyclical (6 year) one.
It's all part of the plan.
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