Monday, January 3, 2011

Trouble Ahead: Investors Overpaying for U.S. Equities

We have reviewed the key economic drivers including real unemployment, commercial and residential real estate, real interest rates (achievable by consumers) and energy (supply, demand and price) metrics.

We maintain our position that nothing has changed in U.S. Economy to support a sustained equity market rally. Institutional and retail capital has been deployed at very high price to cash flow levels in U.S. equities, or in simplistic terms, investors continue to overpay for U.S. Equities as measured by the major indexes.

We do not believe that the U.S. Equity market price levels are sustainable

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