Tuesday, September 28, 2010

No More Glorious Stock Returns, It's Over, But Fed's Fisher Says Investors Are Chimpanzees

Investors are wonderig what Ken Fisher is smoking these days

At the Forbes Global CEO Conference in Sydney he said: “We are chimpanzees with no memory,” “The next 10 years are going to be just as good as the 1990s. The problems in this current environment we think are so different, and so new and so unique. It’s the same stupid old normal we’ve always had. We’ve got a great future.”

Amazing, simply amazing.

Bill Gross suggests that this type of investor has not been to Japan - in the last two decades. He says: “The most likely consequence of simulative government policies that strain to get us there will be a declining dollar and a lower standard of living,” “Stan Druckenmiller is leaving, and with good reason. A future of low investment returns, and a heap of trouble for those expecting more, is what lies ahead.”

According to Gross, the “new normal” will be an environment where future investment returns will be far lower than historical averages", “If bond investors believe that the resplendent and abundant capital gains of the past 25 years will be duplicated from yield levels of 2 to 3 percent -- well, they just haven’t been to Japan, have they?”

Besides the chimpanzee comment, Fisher says gross comments are idiotic. Let's see who is monkeying around Mr. Fisher.
No more glorious returns. It's over. (and one more reason capital is fleeing the US to greener - read merging - pastures.
Adds Gross: "Even as the best route to economic prosperity is the good old-fashioned route, involving things like investment production and new technology development, the Federal Reserve policy makers will resort to reflation through a combination of low interest rates and quantitative easing."

(quotes on Bloomberg).

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