Dennis Gartman is the editor and publisher of The Gartman Letter, a daily commentary on the global capital markets. Gartman has lectured on capital market creation to central banks and finance ministries around the world, and has taught classes for the Federal Reserve Bank’s School for Bank Examiners on derivatives. He often appears on CNBC Television and Bloomberg Radio, discussing commodities and the capital markets. We recently spoke with Dennis, who will be a keynote speaker at our Inside Alternatives & Asset Allocation conference (Sept. 24-25 – Las Vegas).
Inside Alternatives Conference: A few weeks ago you predicted the Dow would rise to 30,000. How long will it take and what will drive it?
Dennis Gartman: I did not predict that the Dow would hit 36,000; I said it was a possibility from purely technical considerations and nothing more. Eventually… in the decades ahead… there is no question but that the Dow will eventually hit 36,000, but at 68 years old do I expect it to do so in my remaining reasonable lifetime? Not really. But shall it happen in my daughters’ lifetimes? Almost certainly.
Inside Alternatives Conference: Is there any way the next decade for equities can continue to produce 7% returns? Many like Rob Arnott and Cliff Asness see sub-par returns?
Dennis Gartman: No there is no way that stocks can produce, for any reasonable period of time, returns of 7% or more again. As the Chairman of the University of Akron’s investment committee for its Foundation I have actually pushed through a cut in spending from our endowment to 5 ½% from well above that level because of my belief that 7%+ returns shall be quite nearly impossible except for very short… 1-2 year… periods of time
Inside Alternatives Conference: You are a commodities expert. Which commodities do you favor and what are you avoiding?
Dennis Gartman: I favor the grains… wheat firstly; corn secondly. Wheat production is falling and export demand remains high. As for the commodities I am “avoiding,” I am avoiding nothing for I am convinced that a broad ownership of commodities generally will out-perform equities on balance for the next several years and so I’m either bullish of commodities in broad catholic terms or neutral of them in narrow parochial terms.
Inside Alternatives Conference: Are crypto currencies for real?
Dennis Gartman: Crypto currencies are THE BUBBLE of our time; however, the block chain is very much for real and will change the very manner in which we trade almost everything… from mortgages, to ships at sea, to shoes for export, to textiles, to stocks and bonds!.
Inside Alternatives Conference: What is your biggest fear and when does the next recession arrive?
Dennis Gartman: My biggest fear is that the President of the United States, along with “nationalist” and trade protectionists who have been coming to power abroad, will do somethings wholly untoward and precipitate a recession; but there is always hope that cooler minds shall prevail. As for the next recession, it will happen 6-9 months after the Fed funds rate moves above the rate on the 10 year note, taking the yield curve at the very front end to an inversion AND 6-9 months after the Conference Board’s Leading Indicators turn down. In other words, a recession cannot begin at the very earliest until sometime in early ’19… if then.