Depression Likely, but Buy Stocks: Strategist

The global economy is likely in a depression, not just a recession, and will continue to deteriorate from here, but that doesn’t mean that stocks aren’t a buy, Roger Nightingale, strategist from Pointon York, told CNBC.

“I don’t think we’re in recession… I think there’s a 75 percent chance we’re in depression and in depression you go on for a long, long time and you cannot control it,” Nightingale said.

“I’m expecting the world economy to be very, very dreary indeed, possibly going downhill for the next three or six months, and having a cyclical recovery after that, but a rather anemic one,” he added.

Despite Nightingale’s gloomy economic outlook, he expects stocks to recover from here as companies secure “satisfactory” profits and the wage earners are left dealing with the brunt of the slowdown.

“We’ve already seen the bottom for the equity market. I think it will be a bumpy ride, but I think we’re going up,” he said.

“Just because we have a bad economy, it doesn’t necessarily mean we have a bad stock market, on the contrary,” he added.

Nightingale is bullish on companies that have a lack of competition within their sector and can ensure strong profits.

- Watch the video above for Nightingale's views on inflation and more.

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