I was recently asked by some commentator, why would the market go down? And I was at a meeting of economists and, whereas in 2009 all of them were very bearish, S&P 400 and this and that – I have to say, at the time I said the market is so incredibly oversold, in my view it will go up. Then in 2012, March to June, when the European markets were at the low and the euro was very weak – some European markets in March to May 2012 were lower than they had been in March 2009. But between March 2009 and March 2012, the S&P had more than doubled but the European markets had gone up and then collapsed somewhere lower than in 2009, such as Portugal, Greece, Spain, Italy, France. I told them, now is the time to put some money in Europe. All of them were very bearish.
So this group of economists, very intelligent, all academics who know much more about economics – or at least the Keynesian economics theories – than I do, and now they're suddenly all very bullish. That tells me something. I agree with Jeremy Grantham and John Hussman: Statistically seen and from an evaluation point of view, the market will have low returns over the next ten years.
Now, can the market go up another 30% before it falls 80%? Yes. Possible. But it can also start to go down relatively soon. I think the second half of this year will be a big disappointment for many people.
