Ajay Kapur says "10% of the U.S. economy...is slowing down." So why is the chief investment officer of First Horse Capital still so bullish on American equities? He explained his optimism to CNBC's Mark Haines, on "Squawk on the Street."
Kapur said that a strong increase in global liquidity, plus interest rates worldwide being kept on hold, make a "very good story for the supply and demand" of equities -- with shrinking availability driving up valuations in Europe and the U.S. The CIO conceded that the U.S. housing and automobile sectors are slowing, but declared that the economy's "other 90% is doing great."
Kapur scoffed at the fears of an "impending blowout" in private equity. He likens anxious analysts to those who "worried" about the dot-com bubble in "1997 or 1998" -- "a bit too early." The investment chief pointed out that bubbles have a way of growing a lot before the burst comes.
"As long as corporate bond yields are below free cash flow yields, this game will continue," he predicted. "We are not anywhere near a recession, or even a slowdown."