‘Trump rally’ has room to run: Buffett and Tepper agree with UGC

Over the past week, we’ve been arguing that the stock market still has room to run despite high valuations. Yesterday, one of the most respected hedge-fund billionaires in the world, David Tepper, gave three reasons why he agrees.

1- Synchronized growth around the world. Europe, Japan, China, and the US are all growing at the same time, which has rarely happened since the financial crisis.

2- No regulatory pressures in the US. With Republicans in charge of Congress and Trump in the White House, we should expect business deregulation, or at least no new regulations. This is good news for future earnings.

3- “Sugar” is still being put on the economy. The three major central banks (the Federal Reserve, the European Central Bank, and the Bank of Japan) continue to boost economic growth with low interest rates.

As Tepper put it, “you can’t be short in this kind of setup”. He’s betting on a 3% growth for the US economy.

Tepper’s comments come of the back of Warren Buffett’s rosy view of the US economy and stock market last week where he expressed US stock prices are “on the cheap side”:

We are not in bubble territory or anything of the sort. If interest rates were 7 or 8 percent, then these prices would look exceptionally high. (…) Measured against interest rates, stocks are actually on the cheap side. (…) If the 10-year [US bond yield] stays at 2.30% and stays there 10 years, you would regret not having bought stocks now.”

You can check out Tepper and Buffettt’s interviews here and here, respectively.

If you want to learn how to invest in stocks and analyse the market to identify profitable and deadly turning points, contact United Global Capital today for a no cost, no obligation consultation on 03 8657 7640 or email [email protected] to learn more about our Quality, Value, Trend (QVT) selection methodology.

COMING SOON – UGC Research available for subscription!

For a small yearly fee, learn how to take advantage of the current bull market and stay ahead of the crowd, with access to market news, updates and 20-30 stock recommendations per year in the Australian and US markets!

The information contained in this article is General in nature and has been prepared without taking into account your objectives, financial situation and needs.

Recent stories

Age Pension and government benefits

When you retire, you may be eligible for government benefits such as the Age Pension or a concession card. The…

Read more

Super, death, and avoiding taxes

By Tony Kaye, Senior Personal Finance Writer, Vanguard Australia Having enough superannuation to enjoy a financially comfortable lifestyle in retirement…

Read more

Starting strong: Your 2021 Tech To Do list

In a year where simply keeping the doors open was a challenge for many businesses, finding the funds for tech…

Read more

Annuities

An annuity, also known as a lifetime or fixed-term pension, gives you a guaranteed income for a number of years.…

Read more

Budgeting 102: Sticking to your budget

Budgeting for a holiday or saving for a deposit? Even the best budget can unravel if the right tools are…

Read more