But the pain is not over according to Ted Oakley, Founder of Oxbow Advisors. Oakley told David Lin, anchor and producer for Kitco News, that most stocks and cryptocurrencies are overvalued.
According to Oakley, markets need to shed at least another 40 percent to correct. He also said that the market’s dismal performance is not entirely the Fed’s fault.
“I think the Fed had obviously something to do with it,” he explained. “… The other side of it is you [had] extremes on any measure. You want to use price-to-book, price-to-sales. Profit margins on public companies were thirteen and a half percent… We didn’t know what would pop the bubble. We just know it can’t stay there because that’s not normal.”
Oakley looks at individual stocks and individual companies, and how they compare to the market, to evaluate investment worthiness.
When asked whether this is a good time to buy underpriced assets, Oakley said, “[this is] one of the worst dip-buying years in the last thirty years… It’s a lot like, really, 2001, where you came off a real big period,  to 2000. Everybody was drunk on the profits. Everything was easy, nothing hard. And then all of a sudden, they had to endure this down, up, down up, but mostly down [market].”
He had strong words about Cathie Wood’s ARKK ETF. “They own a lot of companies that don’t make any money… They’re just overpriced… And if you’re buying something, and you can’t get any return, I’m talking about dollar return on it, cash flow back to you… then you’re making a bad investment.”
Oakley views cryptocurrencies as a “sham,” and of little value to institutional investors. “Show me the economic value. If you can show it to me, I’ll go with it. But there’s none out there right now.”
Oakley dismisses Bitcoin as a store of value because of its volatility.
However, he is not entirely dismissive of the blockchain technology that many cryptocurrencies are built on. “… I think the decentralized finance side, that includes blockchain and that sort of thing, will eventually have a real space in finance… I don’t consider that to be a coin, but I do consider it to be a function.”
To find out Ted Oakley’s stock picks, watch the above video.
Follow David Lin on Twitter: @davidlin_TV
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