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Bill Miller, Tom Lee Remain Bullish on Stocks, as Record Nears

The bull market ends 'when stocks get too expensive relative to bonds or when earnings decline, neither of which is the case now,' Bill Miller says.
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As the stock market again approaches records, the prominent investors Bill Miller and Tom Lee remain bullish.

Miller, chief investment officer of Miller Value Funds, expressed his thoughts in his final investment letter (he’s not retiring).

“Over the past decade or so, my letters have focused mostly on saying the same thing: we are in a bull market that began in March of 2009 and continues, accompanied by the typical and inevitable pullbacks and corrections,” he wrote.

“Its end will come either when stocks get too expensive relative to bonds or when earnings decline, neither of which is the case now.”

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The S&P 500 closed at 4,519.63 Tuesday, not far from its all-time peak of 4,545.85. It has jumped 22% year to date.

As for Lee, co-founder of Fundstrat Global Advisors, he and his colleagues have lifted their year-end target for the S&P 500 to 4,800 from 4,700. That would represent a 6% increase from Tuesday’s close.

Such a move would be in line with the market’s gain after other mini-corrections this year, Lee said in a commentary cited by MarketWatch. The S&P 500 slid 5% from Sept. 2 to Oct. 4.

Stocks also benefit from seasonal strength in the last two months of the year, he said. The economy remains vibrant, the Covid pandemic isn’t as bad as feared, and bitcoin’s strength points to a risk-on environment, he said.

“One should view our S&P 500 target as merely a directional observation. That said, we believe a strong risk-on environment is underway. We do not think consensus is that bullish.”

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