Wall Street’s Top Permabull Suddenly Becomes Its Biggest Bear
by Tyler Durden
ZeroHedge.com
Jan 6, 2017
n the past we had given Tom Lee of Fundstrat, formerly of JPMorgan, a hard time for his relentless, unforgiving permabullishness, which cost investors massive losses during the 2008 financial crisis, when the S&P500 closed some 40% below his target price of 1,450, but in retrospect had been proven right during this relentless monetary- and debt-fuelled rally, which has taken the S&P to never before seen levels (such as the Dow 19,999.63) where valuations are now more absurd than at any time in history.
Furthermore, as Bloomberg writes, “it was Lee’s bullishness that made him the least accurate strategist on Wall Street in 2015, when the S&P 500 slid 0.7 percent.” He doubled down in 2016 as the benchmark climbed 9.5% when his his target overshot once again.”
To be sure, reading his reports over the years, it seemed that nothing could ever dent his bullish ways: so convinced was he that there is nothing that could possibly dereail the market, that a negative outlook seemed inconceivable.
Which is why we were stunned to read in his latest Fundstart note released today – a time when everyone is convinced the market is going nowhere but higher – that the S&P 500 would will finish the year at 2,275, roughly 3% lower than the median forecast of a group of 18 strategists which form Bloomberg’s consensus. His caution is driven by concerns about policy risk and a yield curve adjustment, which he sees translating into an S&P 500 decline to 2,150 by mid-year before the index rebounds according to Bloomberg.
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