Osaka Corp (OSC) - Asset Prices In Bubble Territory.

Osaka Corp - Potential for devastating pullback remains clear and present danger for investors.

Osaka Corp (OSC) have told clients that the potential for a sharp, painful pullback in asset values remains a "clear and present danger" for all investors.

The investment boutique with more than $5 billion under management issued the stark warning in its latest investor newsletter.

According to the newsletter's editorial, "There is a core of investors for whom the mere suggestion that the world's central banks could ever reach a point at which they no longer advocate ultra-loose monetary policy is utterly ludicrous. These investors are the ones behind huge valuations on stocks like Netflix, Twitter and Tesla but they will likely be the worst sufferers when -not if - the penny drops."

"Osaka Corp" analysts suggest that the huge run up in stock valuations last year despite a glaring absence in a rise in corporate earnings was the most obvious canary-in-the-coalmine alerting investors to the disparity between price and value.

"Price and value are two completely separate concepts that some investors have difficulty in distinguishing," explained one Osaka Corp analyst asked to comment on the newsletter.

The firm says that additional worrying dynamics like a record amount of outstanding margin debt used to drive stocks higher is setting the tone for what could be a calamitous correction in asset values that could well see the central banks back in action to prevent a meltdown.

"Investors holding winning positions on stocks should protect themselves by taking a little risk off the table or by converting to cash at an opportune moment," said the Osaka Corp (OSC) analyst.

"Price and value are two completely separate concepts that some investors have difficulty in distinguishing," explained one Osaka Corp analyst asked to comment on the newsletter.

The firm says that additional worrying dynamics like a record amount of outstanding margin debt used to drive stocks higher is setting the tone for what could be a calamitous correction in asset values that could well see the central banks back in action to prevent a meltdown.

Categories:

Finance