{"id":248502,"date":"2010-01-29T15:47:00","date_gmt":"2010-01-29T20:47:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/whitney-tilson-t2-"},"modified":"2010-01-29T15:47:00","modified_gmt":"2010-01-29T20:47:00","slug":"whitney-tilson-us-economic-growth-will-be-feeble-for-years","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/248502","title":{"rendered":"Whitney Tilson: US Economic Growth Will Be Feeble For Years"},"content":{"rendered":"

\"whitney<\/p>\n

Whitney Tilson predicts anemic economic growth for the next few years.<\/p>\n

His views are much like Nouriel Roubini’s.<\/a><\/p>\n

They both agree that the market’s signs of stabilization were not grounded in the fundamentals of economic growth – unemployment is still high, housing prices are still collapsed, and there is still a need to de-lever after decades of excessive consumption and declining savings.<\/p>\n

So in his latest letter to investors,<\/a> Tilson predicts the market rally is essentially over. Once government stimulus and subsidies disappear, he says, the market will be much less robust: 1% annual growth for the next 3-5 years.<\/p>\n

Normal economic growth is 2-3% annually.<\/p>\n

“The US economy will face a significant headwind for a number of years as losses stemming from the greatest asset bubble in history continue to be realized,” he says.<\/p>\n

“We’re not assuming anything other than feeble economic growth in the US for many years.”<\/p>\n

In his latest investor letter, Tilson explains how his views affect T2’s investment strategy:<\/p>\n

“Our view today of where we are in the cycle is at odds with the market consensus, which is increasingly pricing in a robust economic recovery. In light of this, since March we have steadily gone from playing offense to playing defense, which means we’ve been trimming our long positions, increasing our short book, and becoming more defensive in terms of the nature of the stocks we own.”<\/p>\n

He reminds those with a more optimistic market outlook:<\/p>\n

“If stocks were as cheap as they were in March, we wouldn’t let our macro concerns deter us from buying aggressively, but they’re not, as the markets have delivered nearly five years of average stock market returns in only 10 months!”<\/strong><\/p>\n

Read the full analysis of T2’s short and long positions and the letter itself over at Marketfolly.<\/a><\/p>\n

Join the conversation about this story »<\/a><\/p>\n

See Also:<\/b><\/p>\n