How to Avoid Overvaluing Stocks in the Stock Market

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Most bull markets begin with the five day rate of change of the SP500 greater than 7.4%. We did not get it this time. Our highest five-day rate of change was 6% and change in June of June lows. If you find a company that management is owning it a stock, you can imagine they're owning it for the right reason. But if you find aCompany that's built by something like Amazon was once a great example,. Apple was a great example. You find a good company with good management that's skin in the game.

Rebecca Hotsko talks to Milton Berg about his shift from fundamental to technical analysis, his critiques of value investing, his use of market indicators to identify turning points, and much, much more!

Milton Berg, CFA, is the CEO and Chief Investment Strategist of MB Advisors, LLC. He has worked in the financial services industry since 1978 and began his career as a Commodities Analyst and Trader at Swiss-based Erlanger and Company. He has worked with well-known titans of the hedge fund world including Michael Steinhardt, George Soros, and Stanley Druckenmiller.

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro.

02:30 - Why Milton transitioned from being a fundamental investor, studying Benjamin Graham and David Dodd, to a technical analyst?

10:49 - What drives market prices in the short term and long term, and are they random?

16:25 - Milton’s criticisms about value investing and learning from studying Benjamin Graham.

34:54 - How his investment strategy works, which is centered around identifying significant turning points in the market?

35:06 - What indicators he uses to assess whether the market is at a turning point.

45:25 - Whether Milton believes we are near a turning point today and the market has already seen its bottom.

53:00 - Is it possible to time the market?

01:00:33 - Advice on the most important factors that long term investors should focus on.

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

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Check out: MiltonBerg.com.
Related Episode: Listen to MI255: Navigating Bubble 3.0: Is This Time Different? w/ David Hay, or watch the video.

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