Why One CIO Is Waiting for ‘a Solid Panic’ in the Stock Market

(Bloomberg) — The stock market has staged a ferocious rebound in the past week after almost falling into a bear market. Don’t get too excited about that, says Victoria Greene, founding partner and chief investment officer at G Squared Private Wealth.

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Greene joined this week’s “What Goes Up” podcast to talk about why she doesn’t think the selling is over, and to give her perspective on the outlook for oil and energy stocks. Below are lightly edited and condensed highlights of the conversation. Click here to listen to the whole podcast, and subscribe on Apple Podcasts or wherever you listen.

Q: Do you think we’ve bottomed yet?

A: I don’t think we found a bottom yet. I just think we’re not done yet. I think this is a little bit more the first leg because I always ask, what is our catalyst, how are we going to get growth? You really haven’t seen a lot of earnings revisions. And so we talk about, well, valuations have come down. Yeah, the P part of the P/E has come down. What happens when the E starts to go back down too? There’s two parts to that.

That being said, it has held — I just don’t think we’re done yet. I think this is more of a relief rally. If you look for the signs of capitulation — the 90% down days, the VIX spiking — we’re just not there yet. Yeah, cash balances have definitely increased and yes, we’ve seen some equity selling, but not a well and true panic. Not to sound like a snob, but I need a solid panic. We just haven’t seen that solid, absolute capitulation, everything selling off. We aren’t there yet. And then my concern also is, where is your growth. Margins are definitely being squeezed and we are going to have to wait until the Fed can send the economy into a recession to stop some of this.

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Q: Your firm is based in Texas. Does the energy industry influence your clients?

A: It probably makes them a little more bullish on the energy industry. But some of our clients, actually we run ex-energy because it depends on what their exposures are. So if you have a privately held…


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