As if I wasn't already concerned about the stock market thanks to valuation levels, now Nouriel "Dr. Doom" Roubini had to make things worse.
What'd he do? Well, the good doctor shed his metal mask and fearsome demeanor and made some decidedly bullish comments. Yes, you heard me right, bullish. On CNBC last week, Roubini said:
I think tactically for the next few months equities could rise because corporate profits are still strong ... But the question is whether the economic recovery is going to be sustained and whether some of the risks we're seeing down the line on the financial markets are going to materialize.
Granted, that's not exactly drunken-grin, fifth-mortgage-on-the-second-home optimism, but when your nickname is "Dr. Doom" a little positive sentiment goes a long way.
So how exactly does this make things worse? Well, Roubini's specialty is economics, and he hasn't exactly been a seer of particular note when it comes to the stock market. While we can connect his earlier dire warnings with the financial and stock market collapse of a couple years ago, I'm not quite ready to don him "Presto the Amazing Stock Picker!" on the strength of one call.
The problem is that normal folk don't really care about economics unless it's going to make them money somehow. Thus, Roubini the economist becomes Roubini the market caller -- whether or not he's particularly good at it.
Drip, drip, drip
I'd hardly be surprised if there hasn't been some impact on Roubini from hearing an endless refrain about how he missed the stock market run-up after the 2009 bottom. And that is how financial markets get you -- they wear away at those that oppose them until the naysayers finally give in and cry "uncle!" and bend to their will.
But of course once even the die-hard bears like Roubini have been worn down enough to start making bullish calls then who's left to drive the market higher?
Don't get me wrong, I don't foresee gloom and doom ahead. However, I'm a conservative investor and like to keep a keen eye on valuations. As such, my focus lately has been on boring, dividend-paying stocks like AT&T
As for Roubini, my fellow Fool Jordan DiPietro was concerned about where the market was headed last April due to Roubini's pessimism. Today, I'm much more worried about the state of the market due to his optimism.
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