Noted Stock Market Bear: ‘Carnage Awaits’

Albert Edwards, global strategist at Société Générale, the French multinational investment bank, is an ardent bear investor, having routinely delivered messages of doom and gloom throughout the years.

He has previously said that the world will enter a “financial ice age” in the near future.

Now, he says, “carnage awaits” stock market investors.

Edwards cited Japan with its dropping bond yields, stagnant equity prices, and U.S. companies, with their immense corporate debt, as examples of why investors should view the current market with trepidation.

His main gripe with the current market is that rising tech stocks have become detached from their real-world earnings.

“The unfolding profits recession will expose the ‘growth’ impostors, and they will collapse, as they are on the wrong ‘growth’ [price-to-earnings] valuations with the wrong [earnings per share] projections,” Edwards warns.

“Just like in 2001, investors will not wait to distinguish true ‘growth’ stocks from the impostors. Investors will slam the whole sector and work it out later.”

Edwards, in the chart below, shows how earnings have deviated from the S&P 500 to levels previously unseen since 2000.

Overvalued tech stock

The idea that tech stocks are overvalued is one that has been floating around the financial industry for a while now.

Back in July, the American multinational investment bank and financial services company Goldman Sachs also lent their voice to the chorus of well-known firms and analysts calling out this disturbing trend.

“The valuation premium for growth is elevated today relative to history; Software in particular now carries the highest multiples since the Tech Bubble,” said David Kostin, Goldman’s chief U.S. equity strategist.

“History shows that stocks with the highest EV/sales ratios typically underperform peers over the long term. In general, these firms deliver the same upside as cheaper stocks when beating growth estimates, but more downside when missing forecasts.”

biden wins

What I’m Telling Investors to Do If Biden Wins the White House

The value of our Bulletproof Wealth Report model portfolio declined modestly over the past several trading days ending Sept. 27, while the Dow Jones Industrial Average fell by 822 points

Options: Meandering Market Tamed by Using a Straddle or a Strangle

When you hear talk of markets trending, people think of uptrends or downtrends. However, markets often get stuck in a trading range. This is the condition where there is no

Warning! Market ‘Death Cross’ Appears

A death cross! According to Investopedia: The death cross is a technical chart pattern indicating the potential for a major selloff. The death cross appears on a chart when a

5 Best Stocks to Buy If Trump Wins the Election

If President Donald Trump wins the election on November 3, 2020, you might want to consider adding these five equities positions to your portfolio: LMT, BAC, AMZN, XLE, TWTR. Why?

5 Best Stocks to Buy If Biden Wins the Election

If Vice President Joe Biden wins the election on November 3, 2020, you might want to consider adding these five equities positions to your portfolio: XLU, TSLA, XLV, MLM, and

TGIF — Ending the Week with a Whimper

Everything is proceeding as I have foreseen. In Monday's "The Week Ahead — 200,000 Deaths Weigh Heavily on the Market," we knew the 200,000th American death would put Covid back

Even If the Overall Market Continues Lower, This Staple Could Maintain Its Upward Trend

Since peaking in early September, the main indices have all three stumbled for the last few weeks with the S&P and Nasdaq falling over 10% from their highs already. Three

tesla stock

TSLA Too Volatile? Two Option Strategies for Tesla Stock

Tesla Inc. (TSLA) is one of the most popular stocks amongst investors. Led by CEO Elon Musk the electric vehicle manufacturer has disrupted the transportation industry, bringing hype to a

pot stock

Pot Stock ‘Blood in the Streets’ Buy Signal Is Here

The cannabis market has been a volatile space in recent years. A wave in legalization, particularly in Canada but also through parts of the United States, led to significant growth

Use Options as Portfolio Insurance in Rocky Times

Since the beginning of September we have seen the main U.S. indices drop. There are a number of possible reasons for the decline, but more importantly I expect the increased

4 Foreign Countries Where You Can Retire On Social Security Alone

Someone once said that retirement is not the end of the road but a highway opening to a new chapter in life. Whoever said that clearly has never experienced a

We’re Beating the Index Off the March Low: Update

The Bulletproof Wealth Report model portfolio is continuing to perform well and is now up 27.4% since the inception of our monthly newsletter on April 13, 2018. Although the value