I see it day after day. Financial headlines talk up money managers who plan to rotate from bonds back into stocks. The eventual end of the bond bubble means the easy money for fixed income managers demands a career re-think but the quality of Wall Street thinking leaves much to be desired.
Stocks are high partly because low borrowing costs enable easy corporate credit for capital spending, but too much expansion will be poisonous when the recession hits again. Stocks are also high because low interest rates encourage American consumers to charge more unnecessary purchases onto credit cards they'll never pay off. The same factor driving the bond bubble has also inflated stocks. Exchanging one bubble for another isn't very bright.
Smarter portfolio managers would look for value in hard assets but I don't see much of that happening. I periodically meet with representatives of a few family offices and private partnerships at San Francisco investment gatherings and they seem to be the only ones thinking outside of the box on asset class selection. This is why I don't give advice on investments; no one ever listens to me anyway and most people aren't worth the time it would take to speak a couple of words.
The lack of general interest in hard asset plays means beaten-down stock prices will finally give me the entry points I need.
