Yes, Blackstone (BX) is now all-in. Yes, there are way too many bulls in the bull/bear survey. Yes, it bothers me that Nouriel Roubini is talking positively about the market. Yes, I worry that Greece seems not to matter. Yes, Israel could attack Iran, and gasoline is going north. Yes, we've got real issues with inflation, as each company I deal with calls out rising costs, and we can witness the corn levitation, even as plantings are up, because of our ridiculous commitment to burning our food in the name of renewable energy.
And yet to get off here, to leave this market, is to leave a market that has people hating much about it, even as we think that the tide has turned to the bulls all over the place.
I have trouble with this short. This stock has been under multi-year pressure because of the long-term bear market in financials. Every business line has been challenged by the government, by a dearth of retail, by a decline in M&A and a slowdown in fixed income.
But that's what's known. What's not known is what happens if the animal spirits of the stock market keep kicking in. Who knows what companies are going to say, "I better buy another company before prices go away"? Who knows what happens if all that brain-dead money in Treasuries starts pouring out? Who knows what will happen if people finally realize that securitization markets are coming back at the exact same time that the European banks are shrinking from their competitive role in the world's economy? Both the Japanese and the European banks are shrinking and are capital-starved at the same time that Morgan Stanley is capital-rich. In the great bear market that was the second half of last year, Morgan Stanley was right where it is now at the start.
But this is a much better Morgan Stanley than people realize, in an environment that might be much better than people realize.
In short, I believe that Morgan Stanley is a core long that can go up 50% if retail comes back and if deals come back, both of which I think can happen.
Keep this stock front and center. It is as the core of what could work here, and I think it could work very, very big.
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