Since the March selloff, we’ve seen an epic recovery in a wide range of assets. Stocks, gold, silver, even bitcoin has rallied in recent months. Gambles said this “everything bubble” makes it impossible to find good value.
The problem is we’ve now had a really crazy ‘everything rally’ and there isn’t anywhere to go any more that looks like decent value. You can’t find anything.
At all-time highs, he thinks gold is vulnerable to any hint of good news. And if the Federal Reserve starts tightening monetary policy again, both gold and stocks will unwind, he said. If rates tick higher:
That punctures the gold bubble. That also punctures the equity bubble.
The stock market bull case
While Gambles is bearish on stocks, one analyst sees a “once-in-a-decade opportunity.” Jun Bei Liu, portfolio manager at Tribeca Investment Partners told Bloomberg there is “so many things to be positive on equities about.”
Equity has never looked cheaper compared to the fixed income and the like. If you want any income or even any growth, you have to go to equities.
Video: Once in a decade opportunities in stocks
Although tech stocks have led the run-up, she sees plenty of opportunity in virus-hit sectors. These stocks are trading at “some of the cheapest valuations,” she said. It’s a once-in-a-decade opportunity to load up on strong companies for the future.