Don Hays is Confident in U. S. Stocks
Don Hays, Hays Advisory Group, was showcased in an interview with Margaret Brennan at Bloomberg.com. Hays said the peak of the panic occurred on August 8th and the market has been forming a bottom. He believes all of the pieces are in place for the market to rally.
Brennan challenged Hays’ thesis by pointing out that trading volume has been light. Hays responded that rallies usually begin on low volume. Volume expands when the market breaks out which has not happened yet, according to Hays.
Hays pointed out the strength of corporate balance sheets and profit margins in the U. S., indicating America was the best place in the world to invest.
Brennan asked Hays where he would invest and he said he was interested in consumer discretionary names like Costco. Hays also mentioned that Warren Buffett had bought shares in IBM which gave him confidence to invest in technology also.
Hays mentioned that Treasuries were only yielding 2%, while stocks provided an 8% earnings yield. Hays said there was lots of cash sitting on the sidelines which would provide fuel for the next rally. He indicated psychological factors would also provide support along with cheap valuations. He added that monetary factors couldn’t be better with the Fed providing “tremendous liquidity.”