Barton Biggs Says U.S. and European Stocks Are ‘Very, Very Cheap’
By Nick Baker and Kathleen Hays
Oct. 24 (Bloomberg) -- U.S. and European stocks are “very, very cheap” after the Standard & Poor’s 500 Index lost 40 percent this year, the worst annual drop since 1931, according to Barton Biggs, managing partner at hedge fund Traxis Partners LLC.
“U.S. and European markets have blown out to record levels of attractiveness versus bonds,” Biggs said in an interview with Bloomberg Television. “We’re at very, very cheap levels.”
The S&P 500 trades for 10.9 times estimated profit for the next 12 months, while Europe’s Dow Jones Stoxx 600 Index fetches 7.7 times earnings, according to data compiled by Bloomberg. The S&P 500’s dividend yield is 3.46 percent, compared with the 10- year Treasury yield of 3.67 percent, the data show.
“There is an extreme level of pessimism and almost despair,” Biggs said. “As long as I have been in the business, those have always been good signs.”
To contact the reporters on this story: Nick Baker in New York at nbaker7@bloomberg.net; Kathleen Hays in New York at khays4@bloomberg.net
Last Updated: October 24, 2008 14:56 EDT |
