Laszlo Birinyi, the president of Birinyi Associates has warned investors to stay away from emerging markets. “There’s still an awful lot of liquidity. That’s why you see these rallies after a piece of bad news: because too much money is sitting on the sidelines,” he said.
Private equity firms are returning to the practice of using junk bonds and leveraged loans to take money out of the companies they own. According to Bryan Krug, portfolio manager of the Ivy High Income Fund, there is a lot of cash chasing all asset classes, and it is allowing sponsors to opportunistically take advantage of the market.
Jim Rogers said that investors should dump the dollar and put their money into commodities. He also said that the greenback will get even weaker as inflation inevitably rises, which will prompt the government to sell bonds and print money to pay down gaping deficits.