Are the Bells Ringing At the Stock Market Top This Time Around?
Stock-Markets / Stock Markets 2013 Sep 28, 2013 - 12:35 PM GMTBy: Graham_Summers
It’s often argued that they don’t a bell at the top.
I would argue that we numerous bells ringing in the financial markets today.
Carl Icahn wants Apple to leverage up to boost returns to shareholders. Apple has maintained next to no debt for the better part of ten years.
Now share price is lagging and the goal is to issue a load of debt to buy back shares. Leveraging up companies that have long had little debt is a classic market mania indicator
Hilton is trying to go public. Put another way, one of the largest commercial real estate/ hospitality chains in the world is going public after being private for over 40 years…
Why go public now? Because you can raise funds cheaply in today’s high liquidity environment and you don’t want to be holding the bag when the economy slumps again.
The large financial institutions that bought homes and real estate in the slump are looking to exit. These groups and their clients didn’t get rich by being wrong.
They’ve made their profits by buying when no one else wanted to and now they’re getting out. Hedge fund Och-Ziff, PE firm Blackstone, and others are unloading their real estate portfolios.
The smart money is getting out of the market. Fortress Investment Group, Apollo Investment Group and other large “smart money” investors are literally “selling everything” they can. They’re not doing this because they expect things to improve and the market to continue to move sharply higher.
Indeed, even investment legend Warren Buffett, who has virtually never advocated against investing in stocks (with the exception of the Tech Bubble) has stated the market is “fully valued” at today’s levels.
Buffett loves stocks. He’s made his fortune investing in them. He is a near eternal optimist. For him to state the markets are fully valued and be sitting in the single largest cash hoard of his investment life is a major indicator that stocks are topping.
If you’re looking for actionable investment strategies on playing the markets, take a look at my monthly investment newsletter, Private Wealth Advisory.
Graham Summers
Chief Market Strategist
Good Investing!
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Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.
Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.
© 2013 Copyright Graham Summers - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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