| Published: Oct. 5, 2021 at 7:14 a.m. ET
“Any given investment can go down 50% to 90% and it can stay down for decades, at least 10 to 20 years.”
The Nasdaq Composite is teetering toward correction territory and the S&P 500 and Dow industrials are halfway there. With jobs data looming for Friday, even the bravest dip buyers may have second thoughts.
Don’t look for reassurance in our call of the day, where the founder and CEO of BullAndBearProfits.com, Jon Wolfenbarger, predicts U.S. stocks may be “on the verge of starting the biggest bear market since the Great Depression.” “Now with the Fed talking about tapering and money supply growth slowing significantly from 39% y/y in February to only 8% y/y in August, perhaps that is enough of a ‘tight monetary policy’ to change investor psychology to a more bearish mood? We will see,” he said in a Monday interview and follow-up comments with MarketWatch.
Wolfenbarger, who spent 22 years as an equity analyst at Allianz Global Investors, said while he’s not a permabear — his newsletter offers strategies for profiting when markets go both ways — investors should heed some warnings signs.
Overbullish sentiment, economic weakness, excessive debt levels and limited policy tools are key ingredients for a market rout worse than that seen in 2008-09, he said, adding that a top for the S&P 500 reached a few weeks ago could have been the start.
One chart he’s watching that predicts future long-term stock returns — a favorite of legendary investor Warren Buffett, the chairman and CEO of Berkshire Hathaway shows equities 30% above the prior all-time high seen in the tech bubble peak of 2000. | |
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