Against Pfeiler’s persistent skepticism regarding investor judgment, in the first part of the series, the editors of E15 pitted the optimist and portfolio manager in one person, Michal Semotan from J&T investment company, as an opponent. The two gentlemen made a big bet for a bottle of expensive red.
While Pfeiler expects the S&P 500 index to decline by the end of the year, Semotan doesn’t share his skepticism, and at one point in the online discussion, it seemed that if they were in the same meeting, harsher words would fly in the air. Pfeiler bets that the main American index will be below 4,350 points at the end of the year (the value of the S&P 500 index at the date of the discussion), Semotan claims the exact opposite.
“The market is overly euphoric and investors are overly optimistic about when rates will start to drop, as well as at what level the rate drop will end,” says Tomáš Pfeiler. According to him, the rally on Wall Street is more of an illusion, since only a minority of stocks participate in it. “Growth is driven by practically seven companies, which are partly linked to the artificial intelligence boom. Without them, the market would be flat,” says the portfolio manager, emphasizing that historically such narrow growth trends have been unsustainable.
In addition, investors drunk on the artificial intelligence boom assume that its effects will appear in the economy, and thus also on the stock exchanges, soon. “The positive effects of artificial intelligence will come, but it will be years away. At the same time, in terms of stock prices, it seems as if it should happen tomorrow,” emphasizes Pfeiler.
Wall Street has “made” about fifteen percent this year, according to its dominant index, technology shares even almost five times. Market skeptics are therefore asking themselves the question of how long the growth trend will last. Pfeiler is betting on a correction that may have been started by the US FED, an unfavorable earnings season, but also simply a gust of “stupid mood”, as expensive markets tend to be fragile and volatile.
“Stocks are expensive relative to bonds and have the assumption that rates will go down. But this will only happen if there is a recession, but then that will also cool the profits. So there is a certain inconsistency in stock valuations,” says Pfeiler, who expects the S&P 500 index to close below 4,000 points this year.
However, he has some precisely targeted and specific advice for investors who are just entering the market under the impression of a stock boom. What would one of the best-known portfolio managers in the Czech Republic buy at the moment and why?
This article is part of the PREMIUM+ package
Unlock exclusive content and ad-free videos on 9 sites.
Try for 1 CZK More information
2023-07-02 17:30:00
#Tomáš #Pfeilers #wild #bet #market #year #hurt #E15.cz
