Barron's latest Big Money poll finds 59% of the money managers it polled are bullish on the market through year end. But, as Barron's notes, it's unclear how much of that bullishness is only in theory. To wit, 58% concede we've yet to see the bottom, and only 26% of them expect to be net buyers of equities over the next six months.
Below are a range of selected comments.
David Corbin - Corbin & Co.
"They don't ring a bell when they announce a sale on Wall Street, but prices are as good as I've seen them in my entire career." He sees Dow 11,000 by year end, fueled by "a mountain of cash on the sidelines," high dividend yields, and M&A. His favorite stocks: UPS (NYSE:UPS), Pfizer (NYSE:PFE) and Medtronic (NYSE:MDT). "These companies have low price/earnings ratios and decent yields, and franchises that are unlikely to be damaged in a downturn."
Steve Ethridge - Stewart & Patten
"We're nibbling here and there, but we still feel there might be some hiccups around the corner." Normally, his firm is 60% invested in stocks, but for now he's at a more conservative 50%.
David Ware - Barrington Capital
Presciently, Ware went almost all cash last September. He's still 65% cash, awaiting another downdraft and a better entry point.
Peter Scholtz - Scholtz & Co.
"They will be walking a tightrope. If they don't get it right, there is going to be a big inflationary problem. We are at a turning point, and I don't think the Fed has the dexterity to handle it." Scholtz, and most of his peers, think inflation, not deflation, poses the greater short-term risk to the U.S. economy. He sees oil regaining $100/barrel.
David C. Hartzell - Cornell Capital Management
"Five years from now, people are going to look back and find it hard to believe GE (NYSE:GE) sold for $5 or $6 a share." Despite the recent controversy, GE is Big Money's favorite stock. Other favorites include Berkshire Hathaway (NYSE:BRK.A), Wells Fargo (NYSE:WFC), Apple (NASDAQ:AAPL), Chesapeake Energy (NYSE:CHK), Monsanto (NYSE:MON) and Loews (NYSE:L). Most overvalued stocks include Amazon.com (NASDAQ:AMZN), Google (NASDAQ:GOOG), Netflix (NASDAQ:NFLX), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C).
- 99% see unemployment rising. 56% expect a peak rate of 10%.
- 74% expect another stimulus package.
- 55% believe the government's PPIP toxic asset purchase plan will stabilize banks and spur lending.
- 44% peg the U.S. as the top global performer over the next 6-12 months. 42% like emerging markets. 13% chose developed Asia.
- 43% foresee GDP going positive again by Q4.
- 34% think we'll see signs of a housing recovery within six months.
- 32% favor large-cap growth stocks over the next 6-12 months. 15% like large-cap value. 9% prefer mid-cap growth.