Pro: the next decade for the U.S. stock market will be like the 1970s

Bill Smead of Smead Capital Management says the next decade for the U.S. stock market will look very much like the 1970s. For investors, particularly ones that belong to millennials, the question is, what does it really mean for their long-term investment strategy?

Smead’s remarks on CNBC’s “Squawk Box Asia”

Simply put, it means that homebuilders and energy stocks are once again going to be the “darlings” in the upcoming years. On CNBC’s “Squawk Box Asia”, Smead said:

According to Smead, U.S. citizens usually hedge against inflation by owning their house, which further adds to his bullish stance on homebuilders and real estate at large.

Similarities between now and the 1970s

Smead built his thesis around several similarities between now and the 1970s. He said:

Right after these events, he added, the first oil embargo came along in 1974 and “all hell broke loose”.

At the time of writing, the XOP ETF that tracks U.S. oil and gas exploration and production companies is up more than 70% on a year-to-date basis.