Rosenberg: Stocks “overvalued by at least 20%”

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The stock market has become overheated since exploding off its March lows and could be in for a strong correction, economist David Rosenberg told CNBC.

“It is overvalued by at least 20%,” Rosenberg, formerly chief economist at Merrill Lynch and now with Gluskin Sheff & Associates, said in an interview. “But it comes down to what your view in corporate earnings (is) going to be. By the time you’re up 60% from any egregiously oversold low, you’ve already got the earnings recovery.”

Source: CNBC, October 27, 2009.

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2 comments to Rosenberg: Stocks “overvalued by at least 20%”

  • Frank W

    Earnings have fallen decisively for 8 quarters now and are predicted to fall again this quarter. What all the jumping for joy is about is that the falls are less bad than predicted by analysts. These predictions have been very bad, so that the falls have only been bad. In any case, many technicians think that “the trend is your friend”.

  • [...] possible decline. For example, Jeremy Grantham (GMO) expects the S&P 500 to drop by 15% to 25%, David Rosenberg (Gluskin Sheff & Associates) sees markets falling by 20% and Doug Kass is looking at -5% to [...]

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