Stocks are still too expensive and rising rates may shock financial system, Seth Klarman warns

Investment legend Seth Klarman went back to his roots at the Harvard Business School to declare that the stock market is still too pricey even with its slide this year.

“You’ve got a stock market that’s one of the most expensive ever,” said the chief executive of the value-focused Baupost Group, in an interview posted on Friday. The S&P 500 SPX is now down 23% for the year. “It’s been a 35-year bond bull market, so that’s going to be a big shock that is going to test I think financial institutions who’ve been hedged, who’s been writing derivatives they shouldn’t write, who’s been stepping out to take greater risks in their portfolio, because if you can’t make it in bonds, people try to make it somewhere else.”

“We’ve clearly had worse here,” he said, noting the Great Depression, World War II, and a lack of civil rights. He also pointed to innovation, not just in Silicon Valley, but in Boston for biotechs, New York and Philadelphia, as well as world-class educational institutions.

Singapore Singapore Latest News, Singapore Singapore Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Millions more homebuyers may be priced out of housing market, as 30-year mortgage rate spikes after Fed’s biggest rate hike since 1994Fed’s 75-basis-point rate hike means millions more homebuyers will be priced out of the housing market: ‘Desperate times call for desperate measures’ My first home loan was 10% . Are people really complaining about 6% ? So a glass half full perspective is that the housing market has been overheated for an extended period as a result of historically low interest rates. Raising rates will help cool the market and bring prices back down to earth for “millions of homebuyers” already priced out. 8-9% mortgage rates by December
Source: MarketWatch - 🏆 3. / 97 Read more »

Asia-Pacific Stocks Set for Lower Open; China's Latest Benchmark Lending Rate AheadChina’s latest one-year and five-year loan prime rates are set to be announced on Monday.
Source: nbcchicago - 🏆 545. / 51 Read more »

Asia-Pacific stocks mixed; China's latest benchmark lending rate aheadChina's latest one-year and five-year loan prime rates are set to be announced on Monday. If that bot was invented by you, you're pretty damn talented, dude.
Source: CNBC - 🏆 12. / 72 Read more »