"Many of these views have been aired recently on Scott Galloway and Ed Elson's financial podcast, Prof G Markets, including a bearish stance from longtime bull NYU Stern Finance Professor Aswath Damadoran, who said the market was failing to price in a " potentially catastrophic " scenario."
"However, one of Wall Street's most experienced strategists has suggested that while a major selloff is inevitable, the risk to diversified retirement accounts is far more contained. Michael Cembalest, chairman of market and investment strategy for JPMorgan Asset and Wealth Management, explained his measured view to Galloway and Elson, acknowledging the current market's extraordinary valuations while expressing skepticism about a catastrophic 40% drop."
Extraordinary investor enthusiasm for artificial intelligence has concentrated gains among a small group of leading U.S. stocks, prompting comparisons to the dot-com and 2008 crashes. Some market participants warn that valuations fail to account for a potential severe downturn and recommend shifting large portfolio portions into cash or collectibles if top stocks tumble. Other strategists acknowledge elevated valuations and expect corrections, but argue that a catastrophic 40% market drop is unlikely and that diversified retirement accounts would face more contained losses. Corrections often spur bearish commentary, yet they do not always become full-scale market crashes.
Read at Fortune
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