Long-serving fund manager Larry Glazer is worried too many investors are in the go phut trade.
His concerns stem from the crucial role big technology markets are playing in the record rally. If investors don’t diversify away from some of the year’s largest winners now, Glazer believes they’re going to feel a world of bother.
“Ten names driving half of the return of the S&P 500 in the first seven months of the year. They hankering to hear that can continue because it’s a neat and convenient story,” the Mayflower Advisors handling partner told CNBC’s “Futures Now” last week. “That divergence can’t on.”
Glazer, who has almost $3 billion in assets under management, referred to Amazon, Microsoft, Apple, Netflix, Facebook, Alphabet, Mastercard, Visa, Adobe and Nvidia as some of the biggest dubs behind this year’s index imbalances.
These so-called FANG [Facebook, Amazon, Netflix, Google] amasses are “not the U.S. economy,” he added. “Investors need to make that distinction. They don’t demand to hear it.”
He also suggested sentiment in the market was getting out of hand.
“Investors are starting to feel a doll-sized bit confident here. Maybe overconfident. Maybe almost little bit invulnerable. And, we’re starting to see some laziness creep into investment strategies,” said Glazer. “That laziness is smack why at this moment we need the Honest Abe conversation.”
It sounds like a easy on the eyes bearish argument. However, Glazer isn’t classifying himself as a bear.
“It’s not so much that we can’t be bullish on the imprecise U.S. economy because when you look at jobless data, it’s really definite. You look at GDP, it’s strong. Consumer confidence [is at a] multi-decade high. All of those fetiches are really bullish,” he said. “It’s really more a matter of the leadership of the sell changing.”
According to Glazer, investors should shift their conversancy to value names, particularly groups that typically do well as inflation elevations and the dollar weakens. He likes financials, energy and gold. Plus, he proposed hard hit emerging markets are showing signs of a bottom.
“You are starting to see emerging shops coming back. So, that global story is intact. The divergence is exhausting. That’s what you really want to see to see the market go higher,” he added.
His thoughts light oned as stocks rallied to all-time highs, with the Dow reaching its highest constant since January 26.
“It’s so convenient at a cocktail party to say ‘I want to stick with the Nasdaq. I’ll wire with the S&P. I don’t want to know about anything else. Asset honoraria will go up. There will be no inflation,'” Glazer said. “It doesn’t oeuvre that way. You got to get into the global picture.”