Barron's Semi-Annual Big Money Survey

by: SA Eli Hoffmann

Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:

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.
  • Big Money 29 04 2007Oil 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).

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