‘You Are Here’: Morgan Stanley’s Mike Wilson Is Still Bullish
"You are here", reads a conspicuous red annotation on a chart showing earnings forecasts bottoming in 2009. The visual is from Morgan Stanley's Mike Wilson who, much to the chagrin of a bearish echo chamber which attempted to adopt him as one of their own in 2018, has been persistently (and correctly) bullish since March. Wilson apparently understands that bearish prognostications have to be based on sound reasoning, or at least on what one believes to be sound reasoning at the time -- never b
4 thoughts on “‘You Are Here’: Morgan Stanley’s Mike Wilson Is Still Bullish”
A few things to think about. In 2009 stocks were off 55-60% from the highs and a former mult of 16.5x earnings (banks were overearning so “true” trailing mult was higher. Today stocks are off 10-15% from the highs. Margins were lower in 09 vs today ( yes industry shift to higher mult tech as well as lower int exp, tax rates, etc explain some). Trade was more free. Populations were less aged, bal sheets (corp and govt) were better in 09 though consumer is better today. Potential growth rates were significant higher in 09 vs today.
Maybe TINA is stronger today but the absolute attractiveness of stocks today vs 09 is not even in the same league. Sorry.
Future returns look extremely low while 09 looked extremely attractive.
Buying stocks now appears to either believe in an economic miracle or a bet on continued asset inflation. I am not making that bet.
With that said there are attractive companies with competitive advantages, opportunities, good valuations, good capital structures.
But for the “market” i am just not buying it. But that is what makes a market.
Trade well and be smart everyone. Good luck.
Wilson, talking about earnings per share, price action and the rest has to be talking about corporations listed on exchanges. What about all the smaller service businesses that will shrink or never come back. How do the corporations succeed without the smaller companies supplying wages to employees who will then spend on the products and services the corporations provide?
I was once seduced the bearish echo camber, it was very hard let go, like the lyrics in the most over played song from a somewhat over rated band: You can check out any time you like, but you can never leave…
Just listening to the solo makes me think the band is NOT so over rated.