Photo: MrBernardLMadoff via YouTube
Despite the recent weakness in job numbers, stock markets are well above their October lows.Now contrarian Bill Fleckenstein is saying that many are mistakenly looking at the stock market as an indicator that the U.S. economy is doing better than expected.
In his latest piece for MSN Money, Fleckenstein, president of Fleckenstein Capital, has said there is one reason he isn’t shorting stocks right now:
“Were it not for the money-printing going on, I would be looking very seriously at getting short, betting stocks will go down. As it is, my enthusiasm is tempered by the fact that it still might be hard to win with that strategy in the current environment even if the market is dealt a large dose of reality in the coming month, as I suspect. I do think the market is quite vulnerable, for a number of reasons, but obviously there is a rather large, oblivious contingent out there.”
This dovetails nicely with a point we’ve been making lately, that investors are divided into fudamentalistas vs. liquidistas.
The liquidistas — which apparently Fleckenstein is — don’t worry about fundamentals. To them it’s all about the policy choices made by the Fed and the ECB. And if the Fed and the ECB have their hands on the pump, then markets will stay higher.