As far as Morgan Stanley’s Adam Parker is concerned, even a broken clock is right twice a day.
The firm’s chief US equity strategist does not want to acknowledge the permabears right now, even with stocks at all-time highs.
Nor does Parker think these folks deserve credit when we finally get a stock market correction.
“We all know lots of people who have called 17 of the last zero corrections,” Parker wrote in a note to clients on Monday.
“Firstly, we aren’t inclined to give them credit when they are finally right.”
Parker then points to Nobel-prize winning economist Robert Shiller as an example of a bubble call that was right, but, well, not exactly.
Shiller correctly predicted in March 2000 that the dot-com bubble would soon burst, which he first recognised nearly a decade before. This call was canonized in Shiller’s book “Irrational Exuberance.”
Parker and colleagues acknowledged Shiller’s correct forecast, but went on to explain the importance of correct timing.
“We are nice people, but most of us would have been banished from the money management industry by 2000 if we were bearish the whole way up on [technology, media, and telecom] valuations,” the note said. “Timing matters and we will continue to monitor the economic, corporate, and credit laundry list to attempt to call the top.”
In the end, Parker said that he doesn’t see a major market correction coming anytime soon and he is loath to call a top where he doesn’t see one forming.