Billionaire investor Ray Dalio believes that the U.S. inventory market is just not in a speculative bubble. The founding father of Bridgewater, one of many world’s largest hedge funds, analyzed the market based mostly on his bubble standards, which incorporates valuation, sentiment, new consumers and unsustainable situations. “When I look at the U.S. stock market using these criteria, it — and even some of the parts that have rallied the most and gotten media attention — doesn’t look very bubbly,” he mentioned in a brand new LinkedIn publish printed Thursday. .SPX 1Y mountain S & P 500 The S & P 500 is wrapping up its fourth successful month after hitting a brand new all-time excessive on the again of continued enthusiasm surrounding synthetic intelligence. The seemingly relentless rally, led by the so-called ” Magnificent 7 ” shares, have led some to fret concerning the sustainability of the most recent bull transfer. Dalio mentioned the valuation of the Mag 7 names are barely costly however not excessively so. “The Mag-7 is measured to be a bit frothy but not in a full-on bubble,” he wrote. “That said, one could still imagine a significant correction in these names if generative AI does not live up to the priced-in impact.” The widely-followed investor in contrast AI darling Nvidia with Cisco in the course of the dotcom bubble within the late Nineteen Nineties. While their value trajectory look related, the trail of money flows has been very completely different. Nvidia’s two-year ahead price-to-earnings ratio is round 37 immediately, whereas Cisco’s a number of hit 100 on the top of the web bubble, Dalio famous. “The market was pricing in far more speculative/long-term growth than we see today,” he mentioned.
https://www.cnbc.com/2024/02/29/ray-dalio-says-the-us-stock-market-doesnt-look-very-bubbly.html
