Alessio Rastani: now is the time to 'get greedy'
Now he wants to exploit the crisis in Europe, and believes that now is the time to 'get greedy'.
Last September Rastani appeared on the BBC under the title of 'independent trader' to talk about the US rescue package. In fact Rastani is a trader, professional speaker and self-proclaimed attention seeker, but his comment that 'governments don't rule the world, Goldman Sachs rules the world, Goldman Sachs does not care about this rescue package', summed up what everyone else thought.In the short interview Rastani said the markets were 'toast' and the 'stockmarket is finished' as major banks had fled to the safety of government bonds.
What now?However, 10 months later, Rastani now believes the tide has turned and investors should again follow the banks, but this time by piling back into equities. He encouraged investors to ignore the negative sentiment from the media.
"What the news does is say that everything is negative, all doom and gloom, but if you look at the stockmarket it is confident. There is a phrase that traders have: 'the markets have predicted five out of three recessions', that means that the markets have always been right as to what is going on in the economy," he said.
"People trying to make some sense form the news are not getting very far because it is saying get out of the markets. Pay attention to markets...there are 20 major funds that do the majority of the buying in the stockmarket, including JPMorgan and Goldman Sachs, and they spend millions employing the best minds to crunch the numbers and predict what is going to happen in the economy six to 12 months down the line."
PositiveAlthough Rastani is reluctant to adopt the tag of 'contrarian', he is positive on expectations for Europe due to the need for more quantitative easing (QE).
"Big funds are getting positive about Europe. QE is helping as stockmarkets love [when governments] print money. Europe will not break apart this year; things were on the brink of global recession in September last year but come November [governments] had started printing again."
Rastani predicted that QE will continue in order to hit inflation targets across Europe which is good for the stockmarket. "European stocks are a good buy. If everyone thinks it is crazy [to buy] and is selling [European stocks] then the market has bottomed out," said Rastani.
"[John. D] Rockefeller said that 'the way to make money is to buy when blood is running in the streets', and I think there is enough blood on European streets."
FavouritesDespite believing there is money to be made in Europe, Rastani is investing his money in US construction and property because of "good news coming out of the housing industry", and unsurprisingly, he thinks Goldman Sachs is undervalued. "'[Goldman Sachs] has reached a bottom and I am looking to buy financials because they are undervalued."
The only financial stock he is staying clear of is Barclays. "There will come a time when Barclays will become a good buy but at the moment it is still looking a bit ugly. Other banks, Barclays' competitors, are benefiting though, HSBC is doing well," he said.
Overall, Rastani is still dreaming of a stockmarket crash but doubts it will happen as the market is looking bullish and he predicted there will be a rally in September.
And as for Goldman Sachs, he will say the bank got in touch after his stint on the BBC, but won't say whether he has been offered the chance to work for the banking giant, instead of just investing in it.