Jim Paulsen "STOCK MARKET WILL BE WEAK FOR 5 YEARS"

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Jim Paulson has come out and said that the stock market returns we’re going to get for the next five years are going to be very weak.

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We’re going to look at exactly why he’s making this expectation that the markets going to be weak for the next five years.

We’re looking at what he said. And I’m going to tell you why you don’t have as much to worry about if you’re a stock picker out there and I’ll explain why in a detail right there. So right off the bat this check this out here, guys, somebody must have flipped his flapjacks wrong.

He is bearish on the stock market. He says stock market returns are going to be weak for the next five years. Okay, five years now Who is this guy? Jim Paulson. I’ve seen him a lot on CNBC and whatnot over the years Bloomberg and whatnot.

He’s a chief investment strategist at the Lefebvre Boyd Group, LLC. He’s also a member of the Investment Committee, he authors market and economic commentary. Like I said, I’ve seen him on CNBC, Bloomberg and a lot of those publications in the past.

Olson has been an investment industry professional since 1983, most recently as chief investment strategist at Wells Capital Management, where he worked for 20 years. All right, I just thought it was fun to like, look up his net worth.

And I was like, dang, this guy’s worth 7.8 billion. I can’t believe it. That’s insane. But I found it wasn’t him. It was a guy named john Paulson, who I think runs a hedge fund. I couldn’t find anything about it.

But the so let’s look at what he actually has to say here. Okay. He says get used to a stock market returns are going to are setting up to have a tough five years ahead as economic benefits shift from Wall Street to Main Street.

That’s the conclusion of a model constructed by Jim Paulson chief investment strategist at Luffy group, who said a sharp rise in consumer confidence, compared with a generational low in unemployment has happened before and almost always signified a low or worse in the market.

This is quote from him because confidence is high today, and unemployment is low, ie the capacity, this recovery is near a peak, the risk return profile of the stock market had worsened considerably now, and investors should prepare for far less satisfying returns for the next five years posted said in a note to clients.

That’s a big prediction there say the market is going to be weak for the next five years. But it’s not like he’s got a doomsday theory for the overall stock market. It was not like he’s one of those guys that has a doomsday theory for the whole economy.

We’re gonna have a crash or stock market crash, a massive recession or depression. You know, he’s not one of those guys. He’s just saying that the market returns are going to be weak. The timing of analysis seems apt as multiple economic signs point to above trend growth ahead.

While stock prices have languished as we know recently, okay. However, Paulson said his main street meter isn’t met by a market timing device, but rather a look over the long term on what can be expected from stocks.

Now the economy may have turned a quarter rising values in the MSM, almost always other than the 1970s, I guess was an exception, coincide with lower equity values and vice versa. The indicator reached its lowest reading since 1960.

As a current bull market began, it now sits at the third highest level as measured by the University of Michigan’s consumer confidence survey compared to the Labor Department’s core measure of unemployment when the ratio is high Mainstreet has probably been good for a while Polson says Okay, so once again.

He’s not necessarily bearish on the overall stock market in the sense of Oh, we’re gonna have a stock market crash coming up, we got a massive recession coming or anything like that.

He just says while looking at the trends and looking at the economy strengthens, we believe that Main Street is going to start getting benefits and wage growth and those type of things, but actually Wall Street, the returns are going to be very good.

So now I want to get into two points with you guys on why you shouldn’t worry quite as much. Okay, you shouldn’t worry quite as much. So the first point, the first point we’ll talk about here is you assuming you know you’re a subscriber here and you actually pick stocks yourself.

You’re what we call a stock picker. Okay, you are a stock picker. And the great thing about being a stock picker is regardless whether the market let’s say goes goes nowhere for a year or whether the stock market goes up 5% in a year, or 20 something percent a year like it did last year, right.

Regardless of what happens. You as a stock picker, give yourself an opportunity for phenomenal returns, okay? The only time a stock picker really, you know, can’t make much money in the market is maybe if we’re in a massive crash at a particular time, a massive recession, something like that.

And even those times, you can pick up a lot of great values everywhere. And also if you know how to play with options, you can make a lot of money on put options, some of those kind of things.

So there’s all there’s always opportunity to make money in the market, but years where the stock market is not going up a time. You as a stock picker, give yourself a great opportunity like this is our time to shine, right? If the stock market is going to be weak the next five years, okay.

If it only goes up 1% 3% 5% a year, it is what it is, us as a stock picker, guess what’s gonna happen, okay, there’s gonna be a ton of stocks that go down massively, there’s gonna be a ton of stocks that go up massively.

It’s our job to find the ones that are going to go up massively and invest in those companies, the ones that are undervalued and have big growth going for him. Okay, it is a simple dealio. Okay, it’s a simple dealio.

So use a stock picker, that’s the beautiful thing is you give yourself the opportunity when the stock market just goes up a ton, right? Everybody makes money, everybody makes a ton of money.

And it’s just grand in whether you’re a stock picker, or whether you just got your money in an index fund, or it’s in your 401k or whatever. Like, regardless, you pretty much make money if the stock market goes up a ton, when when when when the real players start to shine is when the markets not really doing much.

And people are like, dang, man, I can’t make any money off from the stock market right now. And then you got stock pickers out there that have stocks that are up 20 3040 50%. And it’s like I’m doing okay, okay.

So that’s the first point. Okay. The second point is, I don’t totally disagree with him in the sense of stocks might, you know, just kind of be lame? It might be a lame period? I don’t know.

I would say I’m much more bullish on the overall stock market where the overall stock market will go. I’m certainly not bearish on the stock market, like like, unless I see economic data weaken in a real way? Like I’m still very bullish on the stock market.

But could it be a lame period? It could I think it will, I think, you know, the markets will do good. I think there are certain industries in the stock market that I think are going to continue to be weak, such as any industry that counts on low wage jobs, okay.

We’re talking about jobs that pay minimum wage or something very close to minimum wage. Because once you have when the economy is strengthening, okay, everything is getting stronger across the board.

Then it also wages are getting are going up, okay? When you have wages going up, those hurt those business establishments that basically just have a bunch of minimum wage workers. Okay.

And just because the economy strengthens doesn’t mean, necessarily, people are going to go buy more Big Macs, or walkers or something like that, right? Those type of industries can be hurt in a real way.

Also, they lose a lot of their better employees. Because, you know, as the economy strengthens, more and more jobs are available, they’re actually more jobs available right now than there are people out there to fill the jobs United States of America right now.

It’s a pretty remarkable time at the moment right now, okay. So when you have that type of situation, basically anybody that pays low wages, you’re at a huge disadvantage right now.

Because you’re going to have your your workers are going to leave, they’re going to leave, they’re going to go get a better job somewhere else. And a lot of people are unmotivated by getting better jobs and money and those type of things. Okay.

But here’s what happens. Things get more expensive as the economy strengthens real estate, cars, anything okay? across the board, things start going up inflation starts to happen as the economy starts to strengthen. Okay.

So what you end up happening is you have workers that maybe aren’t as motivated. Well, guess what, when everything’s getting more expensive, they’re forced into a situation where they have to go look for a better job, because they’re like, dang, this one, paying $10 an hour is just not cutting it.

Let me go look for another job. Oh, there’s this one open over here for $17 an hour. Let me go apply for that job. That’s what ended up happening. So even the unmotivated workforce, which is a good percent of the workforce out there.

I would say, a quarter to at least a third of the workforce is pretty unmotivated, let’s just put it that way. When you have even those guys and gals reaching out for jobs, that hurts the low paying industries even more, because they’re losing some of these workers that, you know.

They’re just kind of stuck with the last trend of workers, they’re the last trend to workers. It’s a tough situation to be in for some of these companies. Okay, so I think his I think his point is interesting.

I you know, he’s definitely not a doomsday person, which I respect because these Doomsday guys that all are always saying, all the stock market’s gonna crash, we’re gonna have a huge recession.

They say year after year, day after day, it happens every single time. They do this for years and years and years, and then they want to pat on the back when someday eventually the stock market does go down.

When someday eventually we have a recession. It’s like, dude, you’ve been saying that for 567 years. Now. You want a pat on the back? Because finally it came to fruition. Finally it happened. Guess what, guy.

I’m here to tell you there’s gonna be a recession someday there’s gonna be a stock market crash someday Who the hell knows when it’s gonna be it’s gonna happen someday okay, but all these guys that want a pat on the back for you know, saying it whenever it does happen.

It’s like, dude, when you say it all the time. It’s just I don’t even know how these guys have credibility. I think you know, CNBC and Bloomberg, they just bring them on to give ratings up or something and get an interesting conversation but I’m like.

They bring these same guys on sometimes. that have been Doomsday guys for years and years and years and years and 2014 they were saying that we’re going to crash 2015 2016 2017 they’re still saying it’s like Dude, where’s where’s the crash.

We’re still waiting for your big crash man. When when’s it gonna happen? So interesting stuff as always, let me know your guy’s opinion down there that Comment section. I would love to hear from you guys.

As always make sure you follow me on Instagram if you have not already I post a ton of content on there, especially anything in relation to news in the stock market Monday through Friday. A lot of content going on there. Thank you for watching. Have a great day.

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