Economist says stock surge will continue

A self-described "raging bull," economist Robert Genetski will tell a business gathering today stocks are very undervalued.

"I believe they are almost 40 percent undervalued," said Genetski, known for his research and advocacy of classical economic principles. "I believe stocks will be up 20 percent over the course of the next year."

Palatine-based Cornerstone National Bank & Trust Co. hosts its fourth annual Economic Breakfast this morning at the Cotillion Banquet Facility in Palatine.

Genetski will address a wide range of economic issues, from housing to the price of oil.

Genetski on Wednesday said the housing sector, unlike the stock market, has more troubled times ahead.

"I expect housing to continue like this for another year or two," he said. "Clearly, there are problems in housing and housing financing. Now, people are worried it will spill over into the rest of the economy. And I will tell them it won't."

The housing slowdown was due to a tightening of interest rates by the Federal Reserve Bank and a glut in the housing inventory, he said.

However, he expects the Fed to be more "expansive" in the coming six months, lowering its benchmark interest rate to 4.5 percent. That will result in an economic rebound in the spring, he said.

"That rebound will happen regardless of housing not leading the way as it usually does," Genetski said. "I think the economy will be better by spring."

Looking back on his predictions last year, Genetski said he predicted gold and commodity prices would fall. They have done the opposite.

"When people say, 'You told us commodities and gold were overvalued last year,' I tell them they're even more overpriced this year than last year," he said.

Genetski's Web site is at www.classicalprinciples.com.