Market Is ‘8% Undervalued’; No Concern With Tapering: Garzarelli

Don’t be fooled by any market turkeys, says investment advisor and analyst Elaine Garzarelli.

“Based on our proprietary model, the stock market currently, on our very conservative 2014 earnings of 111, is 8% undervalued,” she said in a note to investors on Monday.

“So, people are worried about a bear market, people are worried about a bubble, people are worried about the rise in long-term interest rates, but we don’t see any of that now.”

The analyst, known for predicting the 1987 market crash, is all smiles these days.

“We continue to be in a bull market,” she noted.

“This week our indicators actually rose from last week and the reason was that the Economic Cycle Research Institute Weekly Index rose 2.4% for the week of Nov. 15. It is telling us the economy is coming back from the government shutdown. That’s what we’ve been waiting for, and that’s the reason that our indicators have popped up to 80% from 78.5%,” Garzarelli explained.

Taper Terror

Everybody’s worried about what will happen if long-term interest rates go up, the investment expert says, “then that’s the end of the bull market.”