— This grave assessment is not my own but that of Mohamed El-Erian, Allianz chief economic advisor and ex-Pimco CEO.
— From the point of view of the media source it emanated from, CNBC, it is a great headline … wonderful click bait
— Should it be part of your decision process?
Is El-Erian credible?
By my standards, standards based on his past market calls, the answer is “NO.” I have been posting kort sessions for 7 years dating back to January of 2013 and during that time I have posted on the ill-advised positions of pundits like El-Erian.
Here is a post from mid-June 2013 where El-Erian and his former co-conspirator at PIMCO, Bill Gross, advise strongly for investors to avoid equities just at a time when the market was breaking our of a 13-year trading range to new all-time highs in the S&P 500 (1610-7/1/2013): “Be afraid, very afraid!” was my title, not my advice. Here is a video of El-Erian counseling to “walk away from risk (equities)” back in early June 2013. Walk away from equities just as a new secular bull market begins!
Fast forward to 2016
By May of 2016 the S&P had moved up from 1600 to about 2100 and according to Mr. El Erian’s press agent (CNBC ) he gave a “warning to the world.”
The May 2016 worry:
“Mohamed El-Erian, Allianz’s Chief Economic Advisor, thinks that most investors, institutions and retail, are operating under the assumption that there will be no more Fed Fund rate increases this year.“
El-Erian’s conclusion was that there would be two more in 2016, causing the market to plummet. He was wrong. The market vis-a-vis the S&P is up another 1249 points (better than a 50%) since then. I hope his input did not keep you from making a profitable entry into the market.
Why do they keep calling him back? His pronouncements provide great click bait not great investment advice. Building a panic on the back of the coronavirus is good for business.
Caveat Emptor! When it comes to making money most media sources on money and finance are more interested in their bottom line than yours.
Any thoughts?
he information presented in kortsessions.com represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain securities for illustrative purpose, names where I personally hold positions. These are not meant to be construed as recommendations to BUY or SELL. All investments and strategies should be undertaken only after careful consideration of suitability based on the risks, tolerance for risk and personal financial situation.
Always appreciate your level headed outlook. It stands out tremendously against the backdrop of Chicken Littles. I’ve given up on the mainstream media, it’s like professional wrestling including all the people that think it is real. Continue the struggle to actually contribute to the conversation instead of pollute it. Thanks again.
Thank you Andrew for your encouragement and kind comment!
bk