Hedge fund legend Paul Tudor Jones says this ‘terrifying’ chart should freak out the Fed
Tudor Jones was referring to a chart of the stock market’s value versus the economy, showing valuations not seen since the dot-com bubble of 2000.
The comments came during a closed-door meeting with Goldman Sachs, Bloomberg News reported
The legendary macro trader says that years of low interest rates have bloated stock valuations to a level not seen since 2000, right before the Nasdaq tumbled 75 percent over two-plus years. That measure — the value of the stock market relative to the size of the economy — should be “terrifying” to a central banker, Jones said earlier this month at a closed-door Goldman Sachs Asset Management conference, according to people who heard him.
Jones is voicing what many hedge fund and other money managers are privately warning investors: Stocks are trading at unsustainable levels. A few traders are more explicit, predicting a sizable market tumble by the end of the year.