‘Don’t get greedy’ — Mark Cuban warns investors of stock similarities to 1990s dot-com bubble
Billionaire Mark Cuban told CNBC on Monday that the stock market’s rally from its late-March coronavirus-driven low reminds him of the 1990s dot-com bubble.
“In some respects it’s different because of the Fed and the liquidity they’ve introduced and the inflation for financial assets that comes with that. But on a bigger picture, it’s so similar,” Cuban said on “Squawk Box.”
Cuban, who made billions of dollars during the dot-com boom, pointed to the newfound interest in the stock market from people who weren’t interested before, such as his teenage niece.
“I had my 18-year-old niece asking me what stocks she should invest in because her friends are making 30% per day and other people just randomly asking me that never look at stocks at all what stocks they should invest in,” said Cuban, who sold Broadcast.com to Yahoo in April 1999 for $5.7 billion.
“Everybody is a genius in a bull market,” the “Shark Tank” investor warned. “Everybody is making money right now because you’ve got the Fed put and that brings people in who otherwise wouldn’t participate.”
Cuban said he told his niece that the only way to keep the money you make in the stock market is by “cashing out.” He said, “Don’t get greedy.”
Wall Street closes sharply lower on tech selloff
Wall Street dropped sharply on Thursday as investors fled market-leading tech shares due to mixed earnings reports and growing signs of a worsening coronavirus pandemic, which could exacerbate a deep economic recession.
The sell-off steepened after a tech watchdog group reported that Apple Inc (AAPL.O) faces consumer protection investigations in multiple states.
The bellwether S&P 500 slid more than 1%, snapping a four-day winning streak with its biggest daily percentage drop since June 26. All three major U.S. stock averages lost ground, with falling momentum stocks Apple, Microsoft Corp (MSFT.O) and Amazon.com (AMZN.O) weighing heaviest.
Gold is a ‘safer bet than chasing overvalued stocks’: FXTM
Gold is a better option than “chasing overvalued stocks,” writes FXTM chief mark strategist Hussein Sayed. “With yields expected to remain low for a long time, inflation projections likely to head higher in the months to come and geopolitical tensions on the rise, some great ingredients are present for the precious metal to continue attracting inflows,” Sayed says. Gold is very close to its all-time highs of $1,920 an ounce and is looking ready for more gain. “Only $50 away from the all-time high, it is only a matter of short time for the yellow metal to see a new record,” Sayed writes. In the meantime, stocks are continuing to ignore deteriorating U.S.-China relations. “After ordering the shutdown of China’s consulate in Houston and claiming two Chinese hackers targeted U.S. companies working on the virus and stealing information, we are yet to see the Chinese response,” Sayed notes. “The market reaction to the latest developments has been muted … Hopes for another round of U.S. stimulus and better than expected earnings from the big tech firms is keeping the rally alive despite valuations becoming extremely overstretched. But if worsening U.S.-China trade relations lead to re-imposing trade tariffs, then it’s likely to mark the short term top in equities.”
Yahoo Finance/Bloomberg/ Ranjeetha Pakiam
Gold Nears $1,900 as Veteran Mobius Says Keep Buying
Gold traded near $1,900 an ounce, edging closer to its all-time high set almost nine years ago, as concerns about global growth buoyed haven demand.
Increasing signs that the prolonged coronavirus pandemic is stalling an economic recovery and the recent surge in tensions between the U.S. and China are underpinning demand for the metal. Bullion is heading for a seventh weekly gain, the longest stretch since 2011, while silver is poised for its biggest weekly advance in about four decades.
Negative real rates, a weaker dollar, concerns over the economic cost of the health crisis and geopolitical uncertainties have put both precious metals on track for their biggest annual gain in a decade. UBS Group AG raised its near-term forecast for gold to reach $2,000 an ounce by the end of September, citing its qualities as a diversifier in a low-rate world.
“When interest rates are zero or near zero, then gold is an attractive medium to have because you don’t have to worry about not getting interest on your gold and you see the gold price will rise as uncertainty in the markets are rising,” Mark Mobius, co-founder at Mobius Capital Partners, said in a Bloomberg TV interview. “I would be buying now and continue to buy, because gold is really on a run, it’s doing well.”