After months of shooting up, U.S. markets finally tumbled and flattened out last week. Reasons for the fall include Fed Chairman Bernanke's hints at "tapering" last week, the accelerating Chinese slump and higher bond yields. Is this the end of a bull market or just a temporary decline?
It’s complicated, explains author and entrepreneur and Managing Director of Formula Capital James Altucher.
“I’ve been bullish pretty much always,” says Altucher, who points out he was justified when markets seemingly hit high after high over the past few months.
“I’ve been a little more cautious about blindly investing in the market. The market has been back and forth nervous,” he says. Still, Altucher remains bullish; he claims that markets only fell last week because Bernanke hinted the Fed might soon roll back quantitative easing.
In reality, Altucher says, “every time the Fed has tightened up, the market has actually gone up. In 1999 the fed tightened up and the market practically went up 100% between the time the fed started tightening and the time that the dot-com bubble burst.”
It’s also not a bad thing to have the markets operate without help from the Federal Reserve, says Altucher. “The markets don’t need a dictator.”
As for particular stocks, Altucher is backing Disney (DIS). “They bought Lucas Films for $2 billion and they’re probably going to make $50 billion on the next 20 Star Wars Movies.”
What else would Altucher bet on? Watch the video above to find out what other stocks are in his portfolio.
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