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Lisa Parker

An editor at FOMOdrive

  • Jun 30, 2023
  • 2 min read

Professor Siegel predicted the end of the stock rally

stocks bull and bear and blue background

Investors are wagering that the stock market will increase.

Professor Jeremy Siegel does not believe that there is any justification for an increase in the stock market.

Baupost, a hedge fund manager, has cautioned investors about the potential risks of a "bubble of everything".

At the start of the year, dire predictions for the stock market were made, but these have been proven wrong as the S&P 500 has risen 13% and the Nasdaq Composite has surged 29%, its best start to the year in 40 years, according to The Wall Street Journal.

Traders are hoping to take advantage of the rally and are investing in options that will be profitable if the stock price keeps going up. Excitement is present in all areas, from AI stocks to small, economically-sensitive businesses and local banks.

RBC Capital Markets stated that a lot of people think that the stock market might have already hit its lowest point last autumn.

A surge of enthusiasm has been seen in other market segments, suggesting that some traders are expecting the lagging tech stocks to catch up with the rising ones.

Professor Jeremy Siegel of the Wharton School of Business, who was one of the few to accurately forecast the 2008 crisis, has warned that the stock market rally may be coming to an end and that the US economy could enter a recession before the end of 2020.

Siegel predicted back in January that the S&P 500 would increase by 15% in the first half of the year, which ended up being close to the actual result. However, in the current climate, he finds it hard to identify any growth drivers for the market in the second half of the year.

Hedge fund manager Seth Klarman of the Baupost Group has commented that the investment world is now dominated by trend bubbles such as Bitcoin and meme stocks.

Klarman has warned investors of the potential danger of a collapse of bubbles, which he sees in many areas, such as cryptocurrencies, SPAC companies, and other assets. He believes that trying to keep up with the increasing markets can be risky.

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