Goldman Sachs senior strategist warns stocks could see 'considerable' pre-election downside that isn't being factored into models | Markets Insider

that markets could soon see"considerable downside" based on factors that financial models cannot predict.

What Congress will do next, what the president will say, and how the election will end cannot be forecasted by modeling, the senior investment strategist said. "Those of us who have lived our professional lives really focusing in on the math, I think should feel very humble right now," Cohen said."Because what we recognize is that the models may not be able to properly reflect all of the volatility not just in the markets, but in the economy, in policy, and of course in investor sentiment."Warren Buffett's Berkshire Hathaway shocked investors with its Snowflake and Barrick Gold bets.

While Cohen said that it's not unusual for volatility to rise before an election, there's also been"erratic movement" with regard to fiscal policy. Stocks quickly sold off on Tuesday after Trump tweeted that negotiations for the next stimulus plan would be halted until the election. The famed strategist also said there are"wide gaps" in the relative valuation of stocks. Just a handful of stocks drove the market's record rally following its March lows. Cohen said this can make the market more volatile, and more vulnerable to disappointments.

Surprising big Democrat wants market crash

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