“Global equities will fall 20 percent [~650 on S&P] this year from current levels” – Roubini
What a statement.
He might be right, because he’s got a hot hand, is well educated, and people are listening to him. But there are 11 strategists just as educated, forecasting a target of 1050 on the S&P by year end.
But for him to say something WILL happen, is ridiculous. How does he know what people will be paying for a dollar of risk? What the market has priced in. What the market will price in. What will the market be paying for a dollar of equity exposure? More importantly, how does he know what investors will be paying for 2010 earnings, at the end of 2009? Seriously 7x or 9x forward, huh Roubini? It’s one of the hardest things about wall-street. Even if you can predict operating earnings, you don’t know what the street is willing to pay for it, and what future earnings is being priced in.
I’m calling the Roubini bubble pops, in 2009.
Only person in the world, who knows what WILL happen, is my mother. Not yours, mine.