Billionaire Ron Baron: THIS is keeping lid on stocks - Yahoo Finance
This is a great article featuring Ron Baron where he reveals why there is a market cap on stocks. Stocks are not going much higher because everybody is pricing in rising interest rates. There is an old saying that when interest is low, stocks will grow, and when interest is high, stocks will die. So, only the best stocks might get double digit returns while the S&P 500 will probably be stuck with single digit returns from now until the next bear market.
Another point Ron mentioned is that the Dow at 18,000 pretty much equals the GDP at 18 trillion dollars. This means that stocks are not overpriced although gains will be slim. He also said that the Federal Reserve will not raise rates fast because high rates will make it hard for the country to pay interest on debts. Thus, we need to buy only "new highs" like AMBA which has more room to run or buy mispriced stocks like natural gas, UGAZ. These two stocks are my biggest holdings.
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