[ad_1]
Billionaire investor Ray Dalio believes the US stock market is not a speculative bubble. The founder of Bridgewater, one of the world’s largest hedge funds, analyzed the market based on bubble criteria, including valuation, sentiment, new buyers, and unsustainable conditions. “If you look at the U.S. stock market using these metrics, the stock market, even some of the parts that have risen the most and gotten the most media attention, have not fared much better,” he wrote in a new LinkedIn post published Thursday. It doesn’t seem lively.” .SPX 1Y Mountain S&P 500 The S&P 500 is coming off its fourth winning month, hitting new highs on the back of continued enthusiasm around artificial intelligence. The seemingly relentless rally led by the so-called “Magnificent 7” stocks has some concerned about the sustainability of the recent bullish run. Dalio said the Mag 7 name has a slightly higher rating, but not an excessively high one. “Mag-7 measures a little bubbly, but not completely bubbly,” he writes. “That said, it’s still possible that these names could undergo a significant correction if generative AI fails to live up to its priced-in impact.” During the com bubble, we compared AI darlings Nvidia and Cisco. Although the price trajectories look similar, the cash flow paths are very different. Dalio pointed out that Nvidia’s two-year forward price-to-earnings ratio is currently about 37 times, but at the height of the internet bubble, Cisco’s multiple was 100 times. “The market was pricing in much more speculative, long-term growth than we’re seeing now,” he said.
[ad_2]
Source link
