Veteran market guru Dennis Gartman is warning savvy investors that the lofty sky that the current raging bull market has hit just might indeed be falling.
The stock market is "egregiously overpriced," Gartman told CNBC on Friday.
"I don't care which valuation you put upon it — price to earnings, price to book value, margin usage — the market is extremely high," the editor and publisher of the Gartman Letter said in an interview with "Power Lunch."
Gartman said it is "ill-advised" to be buying stocks right now.
He described the current bull market as "protracted."
"These things will end. And it will end badly when it does end," he predicted.
Meanwhile, a record number of investors say equities are overvalued and three-quarters say internet stocks are expensive or in a bubble, a recent Bank of America Merrill Lynch fund manager poll showed, with tech-heavy Nasdaq deemed the most crowded trade.
In the BAML poll, a net 44 percent of investors said equities were overvalued, beating the previous record high set in 1999’s dotcom bubble, Reuters reported.
Being long Nasdaq was seen as the most crowded trade for the second month in a row, cited by 38 percent, up from 26 percent in May.
Some 57 percent said internet stocks were “expensive,” with 18 percent describing them as “bubble-like.” A net 84 percent of respondents said the U.S. was the most overvalued region for equities, a new all-time high.
Despite these concerns, investors raised their global tech sector allocation to a net 37 percent overweight from last month’s 33 percent overweight. Their overall U.S. equity allocation rose slightly to a net 15 percent underweight from a net 17 percent underweight last month.
The S&P 500’s technology sector has ballooned nearly 14 percent since President Donald Trump’s inauguration in January to its most expensive since early 2008 in terms of price to earnings expectations.
“Market vulnerability to profit weakness is very high, with investors’ perception of excess valuation coinciding with high global profit expectations,” said Michael Hartnett, chief investment strategist at BAML.
(Newsmax wire services contributed to this report).
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