Just a Dip Ahead
Veteran investor and BMO's CIO Jack Ablin, discusses the recent market decline, the prospect of Fed tapering, and what he sees for the market in the next few months.
SPEAKER: Hi, my guest today is Jack Ablin. Hi Jack, and thank you so much for being with us.
JACK ABLIN: My pleasure.
SPEAKER: This market's been pretty good lately, but then on August 15, we had a 225 down day and everybody's panicking now. Is that because of tapering? Is tapering really going to happen, I mean what's your feeling on this market?
JACK ABLIN: Yeah, I think that, certainly, the beginning of the end of quantitative easing; I think a lot of investors were in denial and it could never end. My sense is that the market became untethered from fundamentals back in March. We started trading on this liquidity. So, yeah, there is a little thin air, but the good news is fundamental value is probably, 1550, 1570, so it's probably not that far below where we are now.
SPEAKER: So you're not seeing any great crash coming anytime soon.
JACK ABLIN: No, in fact I don't see a correction, perhaps. I don't see it as a deep enough downturn to warrant even taking risk off the table. That said, if you've got money on the sidelines and you're looking to put it to work, I think there are probably entry points over the next month or two.
SPEAKER: I guess if you look at it from a contrarian point of view, they've been talking about tapering for months now.