In a Bloomberg TV interview, Milton Berg, founder and CEO of MB advisors says “We’re at the cusp of a 30-year bear market in stocks and bonds.”
Click on link to play.
Berg’s view is on a 30-year bear market is on a “real inflation-adjusted basis, not a nominal basis”. The is the “most over-valued equity market in history, worldwide” …. not even a Mario Draghi “whatever it takes” action will help. “It’s all one big worldwide bubble.”
I especially like Berg’s admission that he does not know how this ends. “Either deflation is going to accelerate, which is most likely, or they [central banks] will turn to real inflation, real printing, rather than just credit inflation. Either way it’s disastrous.”
That has been precisely my view for some time. I too, expect another round of credit-based deflation but I am willing to change my mind if something different happens.
Berg finishes with a bang: “The whole idea you buy stocks and hold them for 30 years was never correct. … The typical investor should be out of stocks and out of bonds and wait for a crisis, and buy during a crisis.”
Not sure when the bond bubble bursts. Stocks are on the cusp now. But as I have stated, there may not be a crash that many bears now expect.
My favored scenario is a series of five to fifteen percent declines over a number of years, with smaller and less frequent rallies, where every rally is a trap.
Such a slow bleed would be far more painful to pension plans counting on eight percent annualized returns.
This is one of the best Bloomberg interviews I have seen in a long time, but I am a bit biased. I would have said nearly the same thing.