"Fed Cutting Rates to 4%" Says Legend
By Dr. Steve Sjuggerud
August 30, 2007
"History tells me the stock market should be going straight up."
–Ed Hyman, yesterday
I love Ed Hyman's work.
If you're not in the investment industry, you probably never seen it. Heck, you might not have even heard his name.
But he's as good an analyst as there is... A jury of his peers (the Institutional Investor poll) has voted Ed to its "First Team" of analysts for 27 straight years.
A dozen years ago (before e-mail!), I loved getting Ed's faxes every morning... They'd be full of the latest polls that he had performed... quizzing CEOs, investors, and everyone, taking the pulse of the markets. Ed would then take out a Sharpie pen and write what he expected to happen in thick black ink all over the charts and fax it off to institutional investors. It was great.
Ed was more accurate than anyone I was aware of. Also, he explained his logic and the probabilities of what he thought. Again, he was generally right on.
Yesterday, Ed shared his current thoughts in a video interview (it's available to users of Bloomberg Terminals). In the interview, Ed doesn't pull any punches. He says: "Investors should be in the stock market."
"History tells me the stock market should be going straight up," he said. And then he backed up his statement with his typical logic...
"We're still slowing," he said... but "I don't think we're going to have a recession." The news on the economy and corporate earnings will be disappointing, but that's actually when you want to be a buyer. This is because "the Fed will keep easing for the foreseeable future," he says.
Ed predicts the Fed will cut rates all the way down to 4%. With the current rate at 5.25%, some may think this is an outlandish forecast. It really is an extreme forecast, by Wall Street standards. It might be outlandish if it was coming from anyone but Ed Hyman. Since Ed believes it, you have to seriously consider that it could happen.
In short, Ed Hyman – one of Wall Street's very best analysts for 27 years running – says the Fed will cut rates "to 4%" and "the stock market should be going straight up."
When Ed Hyman speaks, I listen. His record speaks for itself. And right now, he says interest rates will fall and stocks generally soar when that happens.
So while many investors are scared, I am considering the case laid out by Ed Hyman... I am looking for great buys to share with the paid subscribers to my newsletters True Wealth and Sjuggerud Confidential. If you can, join me for the ride...
Good investing,
Steve
P.S. You can learn more about Ed Hyman at www.isifunds.com. You can read about his comments yesterday at Bloomberg (type: "Hyman" in the search box). And if you'd like to learn more about subscribing to one of my letters, click on the links above.
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