COVER STORY: Buckle Up! by Jack Willoughby
Summary: Barron's semi-annual survey of Big Money Pros. Now that the Dow reached and surpassed 13,000, many analysts are turning cautious:
- Only 46% of the 113 Big Money Pros responding are bullish or very bullish on stocks through year-end, down from 64% in the fall and 57% last spring. 4% expect to see a Dow 14,000 this year; 38% see it by June, 2008.
- Potential bullish factors: ongoing earnings beats and a Fed interest rate cut. Potential bearish factors: Interest rate hikes, earnings misses, and geopolitical strife.
- 24% foresee recession in the next year; average GDP growth estimate is 2%.
- 69% think the Fed won't touch rates in the next half-year while 27% think they'll lower them.
- Oil prices will fall to $60/barrel by year-end.
- 65% felt it's more difficult to find undervalued stocks with compelling growth prospects, up from 49% last fall.
- The Pros' average investment mix: 73% equities, 17% bonds, 7% cash. Equity mix: Large-cap 62%, mid-caps 23%, small-caps 15%.
- International stocks: 55% are bullish on Asian stocks, 40% on Latin America, and 38% on European stocks.
- Hot sectors: tech, energy, healthcare, and basic materials. Sectors most likely to lag: financials, utilities, consumer cyclicals.
- Pros' Favorite stocks: Apple Computer Inc. (NASDAQ:AAPL), Intel Corp. (NASDAQ:INTC), Berkshire Hathaway Inc. (BRKA), Dell Inc. (NASDAQ:DELL).
Related Links: Atlas America and Other Long Picks in the Oil & Gas Sector • The Long Case for Semi Stocks • Tweedy Browne: Long Ideas for Foreign Exposure and Dividends • The Bar Mitzvah Portfolio: Five Long Term Winners