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Pragmatic Capitalism

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UBS: Where are the Bubbles?

This is a pretty good list from UBS on where the bubbles might be.  I take issue with the first one, however as I definitely don’t think there’s a bubble in government bonds.  Maybe Jeff Gundlach was right when he said there’s a bubble in central banking….That said, maybe we should just swap #1 out with Japan where the equity market looks frothy to say the least:

“We take a restrictive definition of bubble. The asset has:

(1) to be valued beyond the reasonable bounds of fundamentals and
(2) could correct rapidly.

This leaves us with only five candidates.

(1) Risk free rates: Treasuries, bunds, gilts and JGBs
(2) Credit, particularly in Europe
(3) Real estate in Asia
(4) EM stock markets: Specifically: Indonesia, the Philippines and Thailand.
We would also add Mexico on the grounds that it is expensive, illiquid and
of 28 stocks that UBS covers in the region only 5 have Buy ratings.
(5) Australian banks”

Source: UBS

Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC.Orcam is a financial services firm offering low fee asset management, private advisory, institutional consulting and educational services.Cullen is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
Cullen Roche

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