Most folks are a bit on edge about the economy right now, what with slowing GDP and stagnant job growth at home and the continued trouble in China and Europe.
But “100% bearish” on stocks?
In a recent interview with Chuck Jaffe of MoneyLife , that’s the outlook Charles Biderman , chief executive officer at TrimTabs Investment Research. Biderman told the institutional clients who get TrimTabs that he is “100% bearish” on U.S. stocks.
Even after a roughly 18% run for the S&P 500 since January 1.
“A perfect storm appears to be in the offing, where Europe, the United States China, everything is going to implode … all going to hit by the fall or maybe late summer,” Biderman told Jaffe in an interview.
He went on to say data indicates there has been a “less than 1% gain in after-tax, after-inflation take-home pay” and that’s the most important metric to pay attention to in regards to consumer spending or the broader economy. The fact that companies are simply hoarding cash and buying back stock is proof that trouble is on the horizon.
So where should you invest? Biderman is focusing on gold, short-side investments and inflation-protected bonds.
“I definitely want to be short and safe,” he said.
Now, Biderman did admit to starting the year bullish so I will give him the benefit of the doubt and not assume he’s sitting on an 18% loss in his short positions or a 21% loss in his gold position year-to-date.
But it’s important to note that the bears have been dead wrong all the way up for the market as gold has collapsed and U.S. stocks have soared.
And as for that inflation bet? It’s running at a 0.5% seasonally adjusted annualized rate according to June figures from the Bureau of Labor and Statistics.
Hardly hyperinflation, guys, and continued highs for the markets could continue to prove the bears wrong.
- Inflation data from the Bureau of Labor and Statistics. (BLS.gov)
- More on TrimTabs and Biderman. (TrimTabs.com)
- More on Chuck Jaffe and Moneylife. (Moneylifeshow.com)
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.