Jim Cramer: "Not a soul is bullish"

The only bullish aspect of today is not a soul is bullish and there seems to be no reason to rally.

~ Jim Cramer, Twitter, June 24, 2013

Larry Fink: Investors need to take more equity risk in order to meet retirement needs

We’re not going to change human behavior, but we need to find ways to influence it. Investors don’t take a long-term view. They are too concerned about all the noise out there, all the ups and downs in the markets.  That noise – and the concern people have about outliving their savings – are ironically driving investors to investments they perceive to be safer, like traditional bonds.  But they should do just the opposite, taking advantage of their longer investment horizon to keep their money working for them.

[Pension plans and individuals have long used traditional government bonds to help fund retirement obligations.]  That worked for 30 years of falling inflation and interest rates and eight percent returns on Treasuries. But it doesn’t work today when the 10-year Treasury yields less than two percent. And the very real risk is that people over-allocating to traditional bond funds are going to lose money when interest rates rise.  The old rules of investing – 60 percent equities, 40 percent fixed income and an increasing share of fixed income the closer you got to retirement – won’t work today.

~ Laurence Fink, CEO of BlackRock with $3.936 trillion under management as of March 31, "BlackRock CEO Declares Longevity 'Defining Challenge of Our Age'," Business Wire, May 7, 2013

Alan Greenspan on the Fed's exit strategy

The sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve - that everybody agrees is excessive - the better.  There is a general presumption that we can wait indefinitely and make judgments on when we're going to move.  I'm not sure the market will allow us to do that.

~ Alan Greenspan, as appeared on CNBC, June 7, 2013

Ted Aronson on staying the course with stock and bond investments

For good reasons and bad, I’d hold tight. The good include my faith in capitalism and its ability to weather a storm, even one of biblical proportions. The bad reason is, I have no faith in my ability to time this sort of thing. Even if I got out in time, I probably wouldn’t be able to correctly time getting back in!

I remain a broken record. The song remains the same. I am sticking to it. Successful investing includes taking risk (where bonds clearly fall today, I admit), diversifying and keeping costs down.

~ Ted Aronson, head of AJO Partners with $22 billion under management, "Lazy Portfolio creators remain stock bulls," MarketWatch, Paul Farrell, June 22, 2013

Ken Fisher: We're in "the middle of a bull market"

The notion of having a couple of 25% back-to-back years is something that would shock most people.  And we still have a world where most investors over the recent years have been lightening up on equities.  Overall, the notion that it's actually maybe the middle of a bull market, and there's a lot ahead - that's a really impossible concept for most people to get. 

I've got this part of me that's a big fan of John Templeton's line that 'bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria,' and I think we're kind of at the point in time where we have one foot in skepticism and one foot in optimism, and we haven't finished straddling that transition.

~ Ken Fisher, interview on Bloomberg TV, June 21, 2013

Kevin Duffy: "We are on the edge of the precipice"

I think we are on the edge of the precipice, a combination of confidence, enthusiasm, selective euphoria, blind optimism, faith (in central bankers), and buy-the-dip mentality (any correction is healthy).  The Bernanke put is the hook.  Everyone fixated on the magical powers of the Fed, totally blind to the utter economic destruction going on.  No one is stopping to consider that stocks are long dated economically correlated assets… and that the economic foundation has been reduced to quicksand. There are signs of delusion everywhere.  Two of my favorites: cash on the sidelines and a wall of bearish sentiment for stocks to climb… patently absurd.

~ Kevin Duffy, June 20, 2013

Niall Ferguson on the limits of monetary policy

The main lesson to be learned this year is the limit of monetary policy.   The story last year was that the Central Banks are the only game in town. The story this year, is that despite stimulus spending which is simply an anti-volatility policy, the economy will not achieve “escape velocity.”

I predict that the limits of monetary policy will be witnessed by the end of this year. We have a structural economic policy problem – not a monetary one.

 

~ Niall Ferguson, Harvard historian, speech given at the 10^th annual Strategic Investment Conference in California, May 3, 2013