Guggenheim’s Scott Minerd on bubble fears: 'Often the best part of bull markets comes at the end'

Published Tue, Mar 2 20215:12 PM ESTUpdated Tue, Mar 2 20217:33 PM EST

Jesse Pound @/in/jesse-pound @jesserpound

Guggenheim's Scott Minerd told CNBC PRO on Tuesday that asset prices appeared expensive in multiple parts of the investing world, but he wasn't ready to call it a bubble. He explained his views on asset prices and inflation in the chat with Brian Sullivan . Watch the full PRO interview above. When asked about asset prices, including stocks, Minerd said valuations were "expensive" but not necessarily in a bubble yet, and even if it was a bubble, a pop wouldn't necessarily be imminent. "Valuation is a poor timing tool," he said. "Often the best part of bull markets comes at the end and will come with an accelerated rise in asset prices." Minerd said that he thought, during the tech boom more than two decades ago, that dot-com stocks were in a bubble in 1998. That was well before the stocks peaked and the bubble popped. Statements and proposals for the economy and the market from policymakers makes it hard to predict when the market will have less support, Minerd said. "For the moment, there's no end in sight, and that is that the Fed has committed itself to the zero interest rate policy, probably under 2023. The Treasury is spending money like a drunken sailor ... and then we're about to see Congress approve a stimulus package," Minerd said. "But don't hold your breath because we're also talking about an infrastructure bill, which could be $2 billion." Minerd also said that he is a collector of Charles Schultz's "Peanuts" artwork and that the jump in prices for those and similar collectibles in recent months was "staggering." Inflation fears Even with excess cash bidding up financial assets and art work, Minerd said that he doesn't believe there is an imminent threat of it causing true inflation. "Excessive money growth does not necessarily immediately lead to inflation, which seems to be the foregone conclusion the market is taking in, but it leads to in the short run inflated asset prices," he said. The impacts of the Covid pandemic on the U.S. economy has helped to create slack in segments of the economy that would delay inflation, Minerd said. He pointed to idle capacity for businesses and high unemployment as factors that would make it difficult for inflation to rise in the short term. Still, the strategist cautioned that modern economies and monetary policy were not immune to inflation and would have to deal with it again in the future. "I'm not a believer in new paradigms. The old rules eventually constrain us ... there will be a day when this excess capacity will be absorbed. The policymakers have indicated that they are very concerned about containing interest rates," Minerd said. Earlier on CNBC's " The Exchange ," Minerd explained why interest rates may actually be set to decline , even as many on Wall Street have projected rates to rise as the U.S. economy recovers from the pandemic amid historically massive stimulus effort. Minerd stayed after his live TV appearance for the exclusive chat for CNBC PRO on broader asset prices.

Scott Minerd, Guggenheim Partners

Scott Mlyn | CNBC

Guggenheim's Scott Minerd told CNBC PRO on Tuesday that asset prices appeared expensive in multiple parts of the investing world, but he wasn't ready to call it a bubble.

He explained his views on asset prices and inflation in the chat with Brian Sullivan.