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Barron's semi-annual survey of 112 Big Money managers. Some key findings:

  • Investment outlook through June 2008: 4.6% very bullish. 42.2% bullish. 33% neutral. 18.3% bearish. 1.8% very bearish. 40% of those surveyed see a 15,000+ Dow by June 2008, and 8% predict 16,000+.
  • Economy: 29% think the U.S. economy will enter recession within the next year; only 7% feel the same about the global economy.
  • When will the U.S. housing market bottom? Next 3 months 0%; next 6 months 11%; next 12 months 53%; Meanwhile, 18% think credit conditions will ease sufficiently over the next three months; 42% over the next six months; 39% say it will take 12 months or more.
  • Fed watch: 62% see lower interest rates over the next half year. 37% say unchanged. 1% say rates will come back up.
  • Portfolio balance: Overall, the group favored big caps. Average portfolios were 65% large-caps, 23% mid-caps, 19% small-caps.
  • Leaders: Sectors that will lead the markets in the coming 6-12 months: tech (66.3%), energy (31.7%), healthcare (29.8%), basic materials (21.2%)
  • Laggards: Sectors that will lag the markets in the coming 6-12 months: consumer cyclicals (60%), financials (57.1%)
  • Favorite stocks (in order): Cisco, Microsoft, Amgen, Apple, Google, Intel, Johnson & Johnson, Corning, GE
  • Most overvalued stocks (in order): Google, Apple, Amazon, Crocs, Research in Motion, Baidu, Goldman Sachs, Sears, Starbucks
FAM Value Fund's John Fox says prudent investors should give White Mountains Insurance Group a look. The property and casualty insurer trades at 7x 2008e earnings of $29.50 a share; at 1.24x book value, it's at its lowest ratio in years, and its portfolio has seen no losses.

Sources: Barron's
Previous Big Money surveys: I, II
Stocks to watch: CSCO, MSFT, AMGN, AAPL, GOOG, INTC, JNJ, GLW, GE, AMZN, CROX, RIMM, BIDU, GS, SHLD, SBUX, WTM

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Source: Barron's Semi-Annual Big Money Survey