Disquiet at exchanges as red warning emerges on possible global market crash
There are palpable anxieties across stock markets round the globe following an expert signal that they are set for a devastating crash.
International stock market expert, Barry James on Monday averred that a “supervolcano” is ready to erupt globally on stocks and markets.
Mr. James, president of the James Advantage Fund, said although there were currently good signs, there were vital concerns for the future.
He said the global market was “upside down” and in the “latter stages” of an economic meltdown.
In a flashing red warning, share valuations have soared to their second-highest ever level, suggesting that many stock investments are over-bought and could be in bubble territory, Express has reported.
The only other time indicators were at this level was before the dot com crash at the turn of the millennium.
Continuing, James noted that companies’ price-earnings ratios, which are used to value their current share price against their per-share earnings, were giving a worrying indication when looking at past experience.
In an extended interview on CNBC, James argued that “Even though [the market] looks beautiful, setting new highs, good momentum, and earnings have been coming in good, here are some of the things we’re worried about.
He said “Number one is valuation levels. If we look at cyclically adjusted P/E, we went back to 1994 and researched team data that said there’s about a one in two times that the market was down in the next 12 months, and about one out of three times it was down more than 10 per cent.
“Also, we see that the market is upside down. In the 18 months ending in June, we saw companies that had no earnings, they were losing money, outperform those that were making money and Tesla is a prime example of that.”
“It doesn’t mean that we’ll see a volcanic eruption in the immediate future, and these market peaks take a long time, but we’re definitely in the latter stages of this market advance.
“We’re going to see the inevitable correction; I just wish I could say I knew when.”
Stock markets in both the United States and Britain have continually topped their highest ever levels in recent months.
