The next decade will bring rewards to those investors who stick it out through the next 12 months, which are likely to be volatile, said Bill Smead of Smead Capital Management in an interview with CNBC. He highlighted capital and labor-intensive companies as highly valuable in the next 10 years, and his firm holds oil and gas as well as land and Canadian lumber manufacturers, which he forecasts will get a boost from the housing market in the U.S. However, the property market was very hot during the pandemic but has cooled down as the threat of a recession looms.
Smead likened the current conditions to the 1960s and 1970s, drawing comparisons of the Vietnam War to “the pandemic war”—a parallel that other analysts have made, especially given the amount of government borrowing compared to the GDP that took place in both eras. Indeed, Christopher Pissarides, the Nobel Prize-winning economist, called the current labor market “worse than the 1970s” back in June, as labor strikes rippled across Europe. And Niall Ferguson, a Milbank Family Senior Fellow at the Hoover Institution of Stanford University, also deems the current era of economic and political turmoil as harsher than the 1970s, predicting a period of political upheaval on the horizon. “The ingredients of the 1970s are already in place,” he told CNBC, when interviewed in September at the Abrosetti Forum.
Validea runs stock and ETF models based on investment strategies with proven long-term track records. If you’re new to Validea, consider taking a look at our product overview or introductory videos.