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A 30% RALLY COMING?

That’s what Burkhard Varnholt CIO of Zurich based Bank Sarasin is betting on.  At a meeting in Hong Kong yesterday Varnholt expressed his optimistic outlook:

“If the next six months of the reaction to this turbulent crisis continue to follow the book of history, which is more likely than not, then that will suggest that equities globally still have another 20 to 30 percent upside from here onwards.”

Varnholt says investors are shifting back to real assets as paper assets continue to be devalued by money printing:

“We are witnessing secular real-asset inflation over paper assets that will last two to three years.”

They are underweight government bonds and overweight metals.  Although Varnholt says real assets are likely to outperform he says the dollar is unlikely to fall much further:

“Fundamentally [the dollar] looks oversold.  For it to decline further, we will need to assume, which we think is unlikely, that there will be coordinated dollar sales, or even a dollar crisis.”

These are fairly reminiscent of the Larry Fink comments from yesterday.   The dollar has bottomed, money printing will continue, but you should buy real assets and stocks.  Something just doesn’t add up there….

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