O’Shaughnessy on How Inflation Impacts Stocks, Bonds

Given the huge growth in monetary supply that the Federal Reserve has overseen in an effort to combat the financial crisis and Great Recession, many top strategists — including Warren Buffett, John Paulson, and Bill Gross — have said that they expect significant inflation to hit the U.S. at some point. And if that’s the case, according to new research from James O’Shaughnessy, active stock selection strategies are the place for investors to be. “If… Read More

Paulson Sees Weak Housing Market

John Paulson says weakness in the housing market is posing a threat to the U.S. economic recovery. “In my eyes, the major risk for the American recovery is the stagnation of the residential real-estate market,” Paulson told French newspaper Les Echos, according to Reuters. “It will be difficult to have a rebound in real-estate prices this year.” (For French speakers, here’s a link to the original article, in which Paulson also discusses the impact of… Read More

Siegel Concerned About Oil Prices

Author and Wharton Professor Jeremy Siegel says his biggest worry about the stock market is oil prices. Siegel tells CNBC that if oil prices level off, he thinks stocks will gain another 10% to 15% this year. He says he’s not worried about the threat of a government shutdown, or the big federal deficit. Siegel also says that turmoil in the Middle East and the impact on oil prices should be driving investors away from… Read More

Dreman: Prepare Now for Inflation

In his latest Forbes column, David Dreman says investors should be preparing now for major inflation. “Several years back I recommended not to follow the dash out of stocks into Treasurys,” Dreman writes. “The greatest risk to investors today is not stock volatility but rapidly rising inflation. Whether inflation begins to shoot up this year or is still a few years out, it will reappear with unexpected ferocity.” Dreman says the huge money-printing and quantitative… Read More

Gross on Unemployment, Inflation

PIMCO’s Bill Gross says he sees the beginnings of a rebound in “animal spirits” in the U.S., with loan activity starting to increase. But he tells Bloomberg that the trend of U.S. companies investing capital overseas is a longer-term drag on the domestic economy. Gross also discusses how much of the current unemployment situation is due to structural forces, and how much is due to cyclical forces, and says that inflation is more of an… Read More

Sonders Talks Inflation, Interest Rates

Charles Schwab chief Investment Strategist Liz Ann Sonders says that, while food and energy prices have been rising rapidly, there is “very little” risk of core inflation right now. She tells Dow Jones that she thinks the Federal Reserve will continue with its lax monetary policy at least through the end of the year, though she thinks it would be better off raising interest rates sooner than that. Sonders also says she’s optimistic on the… Read More

Dreman Positions Portfolio for Inflation

David Dreman says stocks are generally cheap, but he’s still expecting that the U.S. will be jolted by a “really major dose of inflation” at some point down the line. “I’m not talking about at present — this could be two, three years out,” Dreman tells Forbes.com. “But I think we’re going to have a really major dose of inflation. Will it get as bad as it was from 1977 to 1981?  That horrendous period… Read More

Food Price Surges Not Yet Leading to Core Inflation, Says Sonders

While food and other commodity prices have been rising sharply in recent months, Charles Schwab Chief Investment Strategist Liz Ann Sonders says the threat of that leading to generalized inflation remains low for now. “Rising food and energy prices do have an economic impact as they act as a tax on the consumer, which drains discretionary spending power,” Sonders writes in her latest commentary on Schwab’s site. “But as long as wage and unit labor… Read More

Faber: Inflation Should Lead U.S., Europe to Outperform EMs in 2011

Marc Faber says that, in large part because of inflationary pressures, the U.S. and European markets should outperform emerging markets this year. “We have money printing around the world and particularly in the US and that has led to very high food inflation and inflation in energy prices,” Faber told CNBC. “In low-income countries like China, India, Vietnam and so forth, energy and food account for a much larger portion of personal disposable income than… Read More

Dreman: Fed Laying Groundwork for “Serious” Inflation

In his latest Forbes column, David Dreman bashes Federal Reserve Chairman Ben Bernanke, and says it’s likely that the Fed’s continued quantitative easing will lead to “serious inflationary repercussions for years to come”. “As an economic elixir, printing money is a sop,” Dreman writes. “With interest rates already extremely low, it is unlikely to sway corporate executives to expand and hire more employees. Worse still, chances are high that this monetary policy gaffe will have… Read More