market folly

PIMCO's Bill Gross is out with his latest market commentary entitled "Cult Figures" where he essentially claims stocks are dead:  "The cult of equity is dying."

Before reading his latest missive, it's worth noting his inherent conflict of interest: he's at one of the largest fixed income managers out there (of course he would love it if equities were dead and billions in AUM flowed to fixed income managers).

While some may argue his call as a contrarian signal to buy equities, you have to consider that such a call would be a clearer signal if an *equity* investor was staking such a claim.  Capitulation, a shangri-la for contrarians, can't truly come to fruition until the most ardent defenders throw in the towel.

However, one other conclusion from his note is evident regarding inflation.  He writes, "Unfair though it may be, an investor should continue to expect an attempted inflationary solution in almost all developed countries over the next few years and even decades." 

Obviously, he argues investors need to prepare for such an environment and we've posted up the best investments for inflation before (as well as the best investments for deflation for those in the other camp).

At any rate, you can read Bill Gross' latest market commentary embedded below (and download a .pdf here):





For more commentary from the PIMCO man, check out his piece on how to generate returns in a low yield environment.