ZULAUF: PREPARE FOR A CORRECTION IN ALL MARKETS
by ilene - October 17th, 2010 5:38 pm
ZULAUF: PREPARE FOR A CORRECTION IN ALL MARKETS
Courtesy of The Pragmatic Capitalist
Felix Zulauf provided some excellent macro thoughts in a recent interview with King World news. Zulauf believes gold is in a secular bull market, but that the near-term move is overextended. More specifically, Zulauf says the downside in the dollar is overdone and he foresees a dollar rally into the year-end. This will cause a correction in most assets – equities, commodities and gold. He says the correction in gold as a buying opportunity, however.
As always, Zulauf’s thoughts are a must listen. You can see the full interview here:
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Felix Zulauf is Mega-Bearish in Barron’s June Roundtable
by ilene - June 13th, 2010 1:41 am
Felix Zulauf is Mega-Bearish in Barron’s June Roundtable
Courtesy of Joshua M Brown, The Reformed Broker
This weekend marks the halfway check-in with the Barron’s Roundtable and I only got through the first interview with Felix Zulauf before having to put it down for some fresh air. Zulauf is mega-bearish, more so than I remember him being in either January’s magazine or in any prior issue.
Why this is troubling is that Zulauf’s been pretty damn good, better than most of the other Roundtable prognosticators, from what I remember of recent editions.
Basically, he’s saying (paraphrased):
- The pain in European states has been peripheral, now the contagion will penetrate into the bigger, more important countries.
- The only real shot of a stock rally is when another stimulus is attempted or when more money is printed, but these efforts will produce only a temporary bump.
- The potential upside for equities here is only 5%, the downside looks more like 20%-ish.
- Even gold will correct because the party got too crowded lately, but it should be bought close to $1000 an ounce when that happens.
- US Treasuries are a good bet for the intermediate term (2 to 3 quarters).
- Blue chip stocks should only be bought if one’s time horizon is 10 years or greater, anyone with a 1 to 3 year time horizon should watch from the stands.
- The stock market will make a lower low than the March 2009 bottom after more attempts to stimulate fail. He notes that we are trading at 2 times book value now (1096 vs $500) and that stocks didn’t bottom until they were trading at half of their book value during the Great Depression.
So I’m gonna go for a walk right now.
Source:
Handle With Care – sub required (Barrons)
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GURU OUTLOOK: FELIX ZULAUF & THE SECULAR BEAR MARKET
by ilene - January 19th, 2010 2:19 pm
GURU OUTLOOK: FELIX ZULAUF & THE SECULAR BEAR MARKET
Courtesy of The Pragmatic Capitalist
This week’s Guru Outlook brings us the brilliance of Felix Zulauf. Zulauf is the founder of Zulauf Asset Management based in Switzerland and is well known for his appearances in Barron’s annual roundtable. Zulauf has nailed the secular bear market downturn and 2009 upturn about as well as anyone. More importantly, he has been nearly flawless in connecting the dots in the macro picture. From the de-leveraging cycle that led to the downturn to the government stimulus that led to the upturn – Zulauf has been remarkably prescient.
At the 2008 roundtable Zulauf recommended investors purchase gold and short stocks due to concerns with the consumer. He remained bearish throughout the year. At the 2009 roundtable Zulauf said stocks would bottom at some point in the second quarter after making a new 2009 low. He got aggressive and said stocks would rally after that. His recommendations to purchase oil, gold and emerging markets were home runs.
Zulauf’s macro outlook hasn’t changed all that much. He still believes the de-leveraging bear market cycle is with us and that we’re in the early stages. Zulauf sees a number of similarities with Japan and says the consumer is in the process of long-term balance sheet repair:
“we are in the early stages of a deleveraging process, which is marked by a shift from maximizing profits to minimizing debt. It is a multiyear process. The U.S. consumer is in bad shape, and the U.K. consumer is even worse.”
But Zulauf hasn’t turned bearish in the short-term yet. He says the markets have another 10% of upside before concerns over the end of the stimulus begin to weigh on the markets:
“Central bankers themselves are somewhat afraid of what they have been doing. Politicians are worried about public-sector debt. Therefore, the authorities will try to step away slowly from their stimulation efforts, because this policy isn’t sustainable. That’s the risk for the markets. The U.S. stock
market has enough momentum to rise another 10% or so. But the authorities will start leaning the other way as they see signs of economic growth in the first two quarters, and possibly a jump in inflation. That could push the market down.”
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.