Lombardi is long-term bear on the stock market, but now, he is bullish. Here's why:
1. The S&P is trading at 14.5 times last year’s earnings. Since 1991, the S&P has traded at an average of 20.5 times earnings.
2. Interest rates in the U.S. are not rising for the near future, as the unemployment rate remains high.
3. Stock prices have fallen 6.2% since May 2, 2011—and investors are in panic mode. Stock prices usually rise after panic.
4. Investors pulled $5.46 billion out of stock mutual funds last week, according to the Investment Company Institute in Washington—the biggest withdrawal of money from stock mutual funds since the week ended December 8, 2010.
5. The percentage of bullish stock advisors in the marketplace has fallen to a low not seen since September 2010.
No comments:
Post a Comment