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Sydnee Gatewood
Sydnee Gatewood
Articles (758) 

Bill Smead Says US Economy Will Be ‘Quite Good’ Over Next Several Years

Guru discusses bear market rally

January 24, 2019

While many investors fear a recession may be coming soon, Bill Smead, the CEO and chief investment officer of Smead Capital Management Inc. (Trades, Portfolio), told CNBC’s “The Exchange” on Tuesday he believes the U.S. economy will be “quite good over the next five to 10 years.”

“We’ve believed all along here that the rally that followed the big decline from October through December was likely to be more like a bear market rally,” he said. “What you see in bear market rallies is really sharp run-ups in things that have fallen very, very hard right before that and everyone comes on your show or other shows and says, ‘Oh, this is the buying opportunity you’ve all been waiting for.’”

He based his hypothesis on the fact the largest population demographic is going to be centered on the 30 to 45-year-old age group. However, host Kelly Evans pointed out existing home sales are at a three-year low as millennials and generation Xers are not buying houses.

In response, Smead noted the majority of millennials say they want to buy homes and noted the best-performing stocks over the last two months have been homebuilders, which have been treated as defensive investments as mortgage rates have fallen.

“Separate from that, this bull market needs to change leadership to go on,” he said. “That is the bigger subject.”

Watch the full segment below:

US economy going to be 'quite good', says Bill Smead from CNBC.

About the author:

Sydnee Gatewood
I am an editorial assistant at GuruFocus. I have a BA in journalism and a MA in mass communications from Texas Tech University. I have lived in Texas most of my life, but also have roots in New Mexico and Colorado. Follow me on Twitter! @gurusydneerg

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