40% stock market crash is not coming but 'all companies' face this risk - David Barse
The equity markets will sustain their bull run into 2021, but no company is immune to the challenges of technological innovation and disruption, said David Barse, CEO of XOUT Capital.
“We think technological disruption is impacting every company, it’s not just technology companies,” Barse said.
On a coming stock market correction, Barse said that a major fall in equities is unlikely.
“I can’t believe that anyone would think a 40% downdraft is realistic in light of what’s likely to occur as we open up the economy and get through the virus. We have been chilling and suppressing demand, maybe that’s why rates are spiking today, but I remain very much an optimistic bull on the equity markets. I think growth will continue to exceed and extend beyond the expectations that the markets have set,” he said.
Barse’s XOUT index focuses on removing “loser” stocks from the S&P 500 index using a combination of seven factors including a company’s investment into research and development, revenue growth, and most importantly, the company’s ability to adapt to “technological adoption.”
The companies removed from the index include Visa, J.P. Morgan Chase, Walt Disney, Verizon, Comcast, and Coca Cola.
The XOUT ETF has a heavy overweight in the information technology sector.