Peter Boockvar the Chief Investment Officer for Bleakley Advisor Group was interviewed last week by Barry Habib and I was able to watch the interview live on Facebook. Peter is one of my favorites to read and watch as I have learned greatly from him over the years. Here are several items I am passing on to you from his interview.

  • He can't justify why the S&P 500 is currently at 3000 and he thinks the stock market is due for another BIG drop. He asks, "Why is the stock market so high when forward looking earnings are totally unknown?" I totally agree!!!" As Peter was talking about the stock market I thought of this famous quote from John Maynard Keynes, "Markets can stay irrational longer than you can stay solvent."
  • Peter believes that stock market investors will completely focus on the balance sheets of companies going forward. In other words, a return to the basics of investing. And a return to the basics does not support the S&P 500 at 3000 right now I believe.
  • He's afraid there will be a permanent loss of jobs and the unemployment rate will remain above 3.50% for many years. The world has changed!
  • Peter believes the bond market more accurately reflects our current economy than does the stock market. I agree.
  • Because of this he doesn't think long-term rates like mortgages will drop any more.
  • In fact, he thinks inflation expectations will increase in the next year or two and cause the 10 Year Treasury Bill's yield to rise above 1% from 0.70% currently.
  • Finally, he doesn't see the Fed taking short-term rates below 0%.