From Toronto Globe and Mail: “…..What was the trigger of the
‘87 crash when markets fell 21 per cent in one day? What was the trigger of the
Nasdaq crash in 2000? What was the trigger of Japanese crash of 1989? What was
trigger of 2007 crash that brought global stocks down 50 per cent? We don’t
know these things ahead of time, but something will always move markets up and
something will always move them down. I would guess at the present time, given
markets from the 2009 lows have in many cases increased by as much as 100 per
cent, that they are no longer very cheap. .... Something could come along,
geopolitically or otherwise. I would be very careful being overweight equities.
I still have 25 per cent in equities and 25 per cent in corporate bonds.”
He said he feels “deeply uncomfortable” with that much
allocation to equities, but also doesn’t want to shut stocks out entirely given
the possibility they could still rise significantly before a correction.
“In the 40 years I’ve been working as an economist and
investor, I have never seen such a disconnect between the asset market and the
economic reality ... Asset markets are in the sky and the economy of the
ordinary people is in the dumps, where their real incomes adjusted for
inflation are going down and asset markets are going up….” “Something will break very bad.
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