ECRI Chief: Growth “Revival” Coming Soon

Lakshman Achuthan, the managing director of the Economic Cycle Research Institute, says recent economic data puts the “nail in the coffin” of the double-dip recession fears, and says he expects a “revival” of growth in the early spring of 2011. In an interview on Bloomberg TV, Achuthan also discusses the employment outlook and the disconnect between GDP growth and job growth in the U.S. And, he says policymakers are missing the fact that the economy doesn’t need any more stimulus to recover.

Top Forecaster: Real GDP Back to Pre-Recession Levels

While few have noticed, the U.S. has now reached pre-recession gross domestic product levels, says one top strategist who is bullish heading into 2011. In a recent MarketWatch column, Mark Hulbert says Norman Fosback, editor of Fosback’s Fund Forecaster, has extrapolated U.S. GDP data and found that, “as of this moment, we are virtually right there: a 100% recovery” in real, inflation-adjusted terms, of where the GDP was at its pre-recession peak. “And if not, then a couple or a few more weeks at most,” Fosback adds. But while that may seem like a major milestone, few in the media […]

Fisher: 2011 a Year of the “Alpha Bet”

Kenneth Fisher says 2011 is “likely to be very frustrating for bulls and bears alike”. Fisher says the last few years have been years of betting on beta — broad market and economic trends. In 2011, however, he thinks investors will need to make good “alpha bets” — i.e., pick the right stocks or sectors or countries — to make money. He thinks there will be a lot of volatility, with the broader market ending up a little in the black or a little in the red. He expects that the broader bull market will resume in 2012, however. Right […]

Sonders Optimistic on 2011

Charles Schwab Chief Investment Strategist Liz Ann Sonders says she’s optimistic on both the economy and stock market heading into 2011. Sonders tells WNYC News that she thinks people will be “pleasantly surprised” by the rate of U.S. gross domestic product growth in the coming year. She says she expects a significant pickup in job creation, though she thinks structural issues will keep the unemployment rate relatively high for some time. Sonders says those structural problems include both education and the housing market. She also says state and local government financial problems are an issue, but she thinks the improving […]

Yacktman, Stattman Still High on Big Blue Chips

Several top value managers who keyed on large stocks — to their portfolios’ detriment — in 2010 are continuing to focus on big blue chips as we head into 2011. Among them: Donald Yacktman, whose funds have trounced the market over the longer haul but lagged in 2010. “In 40 years I have rarely seen a situation where so many big, profitable international companies are selling at such relatively cheap prices,” Yacktman told Bloomberg. Another top fund manager who is continuing to see value in large-caps is Blackrock’s Dennis Stattman. Back in August, Stattman said he couldn’t “find a stock […]

How to Create Stimulus Without Adding Debt

Yale economist Robert Shiller says the U.S. shouldn’t forget that it is possible to provide more economic stimulus without actually adding more debt. In an op-ed piece for The New York Times, Shiller discusses the “balanced-budget multiplier” theory, which maintains that national income is raised, dollar for dollar, with any increase in government expenditure on goods and services that is matched by a tax increase. “The reasoning is very simple,” Shiller says. “On average, people’s pretax incomes rise because of the business directly generated by the new government expenditures. If the income increase is equal to the tax increase, people […]

Bogle on Fundamentals vs. Emotions

Vanguard founder Jack Bogle recently offered his take on where the market and economy are headed, saying that he thinks stocks should gain about 7% per year in the next decade. Bogle tells Forbes‘ Steve Forbes that while emotions drive the market in the short term, fundamentals drive it over the long term. And right now, he says, given current fundamentals, a reasonable expectation would be for stocks to gain about 7% per year over the next decade. But Bogle also notes that “reasonable expectations” sometimes don’t turn into reality. He advises investors to “be a little careful out there” […]

Navellier, Dreman, and Siebert: What to Expect in 2011

Top growth investor Louis Navellier says he’s bullish heading into 2011, and is high on multi-national U.S. firms and technology companies. “I think you can invest in a lot of big company stocks here in the States and feel good about it because such a high percentage of the S&P earnings comes from beyond our borders,” Navellier tells the Palm Beach Daily News. “You can actually benefit from that if you buy companies like McDonald’s, Dr. Pepper or Heinz. Even something like a Direct TV. Then you have all the big multinationals like Ford, John Deere, Cummings. These are companies […]

Dorfman: Time to Add Risk

Bloomberg columnist and money manager John Dorfman says it’s time for investors to take on more risk. Dorfman tells Bloomberg that investors shouldn’t let the lingering fears from the 2008 crisis impact their investment decisions going forward. He also talks about some of his top stock picks heading into the new year.  

Siegel Warns on Bonds

Author and Wharton professor Jeremy Siegel says that bond investors should be very careful right now. “Anyone that has money in bond funds has to be very cautious” of losses in both the short and long term, Siegel tells The Wall Street Journal. He says that bond buyers are preparing for yesterday’s stock market crash, the Journal reports, and leaving themselves unprepared for tomorrow’s inflation. “Within the next five years, inflation is likely to average between 2% and 4% a year, Siegel says,” writes the Journal’s Sarah Morgan. “That’s not terribly dramatic, but it’s enough to lead to higher interest […]

Forester Sees “Yellow” Light for Market

Fund manager Tom Forester says he sees the market flashing a “yellow light” rather than a green or red one, and he’s focused on healthcare and consumer staple stocks. “Our cash position is around 18%, which for us is cautious, but not extremely so,” Forester tells Morningstar.com. “It is a yellow light instead of a red or green light.” Forester says he sees current valuations are “neutral”, adding, “There is some concern that margins are historically very high, so if they revert to the mean it would suggest that earnings are overstated and would make the market look rich but […]

Reese: Do Hot Holiday Gifts Make for Strong Stocks?

In his latest article for Canada’s Globe and Mail, Validea CEO John Reese takes a look at the stocks of some of the firms behind this Christmas season’s hottest gift ideas. “The holiday gift-buying season has companies pushing their newest and most eye-catching toys and gizmos and gadgets, with consumers lining up to judge them by way of their wallets and purses,” Reese writes. “A hot new gift item can make or break a company’s quarterly, or even annual, revenue and profit results.” But Reese says that a hot holiday gift doesn’t necessarily make for a good stock. “Of course, […]

Montier: Don’t Believe the New Normal Hype

The “New Normal” concept has gotten a ton of attention in the financial and investment worlds in the past couple years. But in a new paper, GMO’s James Montier says not to believe the hype. In a paper posted on GMO’s web site, Montier says that for some economic indicators, there may indeed be a New Normal. For others, however, there isn’t. And, he adds, “what concerns me more than this are some of the implications that proponents of the new normal seem to draw when it comes to investing. … Attempting to invest on the back of economic forecasts […]

Cohen Says Developed Markets More Attractive than Emerging Markets

Goldman Sachs’ Abby Joseph Cohen says that, while she likes the growth prospects of emerging markets, she’s seeing more value in investments in developed markets like the U.S., Europe, and Japan. In an interview on Consuelo Mack’s WealthTrack, Cohen says she thinks money has been pouring into emerging markets in a “herd-like” fashion, and that equities in many emerging markets have strong growth already priced into their shares. U.S. large-cap equities, on the other hand, are priced very attractively. Overall, Cohen says she thinks bonds aren’t looking very attractive right now, while equities are looking very attractive. First Eagle Funds’ […]