Gary Shilling on the Three Reasons Corporate Profits are Vulnerable
Hopes for a poor economy so the Fed will ease further are not the underpinnings for a strong market, according to Gary Shilling in an interview on Bloomberg TV.
Shilling’s advice was for investors to be short stocks, long Treasuries, long the dollar, and short commodities.
If he was to put money into stocks, Shilling said he would focus on investing in dividend paying stocks.
Shilling said there were three concerns making corporate profits vulnerable: 1) strength in the U. S. dollar effecting international earnings; 2) global recession pushing down corporate revenues; and 3) an unsustainable improvement in profit margins the past three years due to cost cutting.
Back in July Shilling said historical precedent indicated the U. S. economy was in recession [link].