Krugman: Austerity — Not More Debt — Is The Danger

Nobel Prize-winning Economist Paul Krugman is continuing to say that the U.S. needs to spend more — not undertake austerity measures — to get out of its economic malaise. Krugman tells CBS This Morning that European countries now undertaking austerity measures are showing how austerity in such situations makes the economy worse without even making […]

Biggs Sees Market Weakness, But No Double Dip

Hedge fund guru Barton Biggs is expecting a few weeks’ worth of weakness for the stock market, thanks to lingering trouble in Europe and a slowing economy in the U.S. “I don’t think that this correction we’re in is quite over yet,” Biggs recently said on Bloomberg Radio’s “The Hays Advantage” with Kathleen Hays. “I […]

Grantham on Incredibly Irrational Markets

In his latest quarterly letter, GMO’s Jeremy Grantham offers some very interesting data on the disconnect between the stock market on one hand, and the economy and “fair value” of the stock market on the other. “This difference is massive — two-thirds of the time annual GDP growth and annual change in the fair value […]

El-Erian: Macro Headwinds Battling Micro Strength

PIMCO’s Mohamed El-Erian says that the U.S. economy is having trouble gaining traction, as evidenced by the latest GDP report. El-Erian tells Bloomberg that in addition to the headline growth number being lower expected, the drivers behind that growth were cause for concern. Consumer spending increased, he noted, but the personal savings rate declined, and […]

The Buffett Approach: Invest Like The Oracle

Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the Warren Buffett-inspired strategy, which has averaged annual returns of 6.3% since its December 2003 inception vs. 3.4% for the S&P 500. Below is an excerpt from the newsletter, along with several top-scoring […]

Ritholtz: Don’t Believe the Hype; American Future Is Bright

Barry Ritholtz of FusionIQ and The Big Picture blog says that, despite what the doom and gloom crowd says, America is not in decline. Ritholtz tells Yahoo! Finance’s Daily Ticker that “there’s a tendency for people to extrapolate the most recent experience out to infinity”, which is what many have done in expecting that the […]

Mobius Bullish on Europe

Templeton Asset Management’s Mark Mobius says he is upping his exposure to European stocks, despite the continent’s lingering debt woes. “The stocks in the European countries have gone down excessively as a result of the bad news emanating from this crisis and we find good investment opportunities at bargain price and we are increasing the […]

Reese: There’s Value In Defense

Aerospace & defense stocks and those of other firms that rely on the government for their revenues are traditionally thought of as safe, defensive plays. Not today, however, with major budget cuts looming if Congress doesn’t address the nation’s deficit woes. But Validea CEO John Reese says that’s not reason to avoid these types of […]

Shiller: Housing Could Fall Further — But Not By Much

Yale Economist Robert Shiller, who predicted the housing market crash, says he thinks home prices could fall further, but he doesn’t expect more major declines. Shiller tells FOX Business Network that he thinks prices “could fall further — not that much probably — because there’s a readjustment in our thinking. … Our long-run opinions about real […]

Tilson on “Panicked Headline Investing”

In a recent interview with CNBC, Whitney Tilson talked about why his firm likes to invest in firms that are the subject of “panicked headline investing”. Tilson says that “we love buying stocks when we think the sellers don’t care about price,” and cites BP as an example, saying that the oil giant had such […]

Hussman: Profit Margins Skewing Valuations

John Hussman, whose funds had strong long-term track records before getting hit hard the past few years, says those who contend stocks are cheap are way off base. “I can’t emphasize enough how badly standard P/E metrics are being distorted by record (but reliably cyclical) profit margins, which remain about 50-70% above historical norms,” Hussman […]

Fisher on Why Today Is Like the Early ’90s

Kenneth Fisher says the market and economic environment right now are reminding him of the early 1990s, and says it’s a good time to buy stocks — selectively. “Let me set the scene,” Fisher writes in his latest Forbes column. “It was just a few years after 1987’s Black Monday market crash and 1989’s Friday […]

Yacktman Still Focused on Quality

Top fund manager Donald Yacktman says that he’s sticking with high-quality stocks. Yacktman tells CNBC that his biggest holdings include Pepsi, News Corp., and Proctor and Gamble. He also says he’d stay away from lower-quality stocks and cyclical firms. He thinks many cyclicals are selling at profit margins that may be unsustainable.  

The Downdraft vs. The Flood

Investor sentiment has been on the rise for much of 2012, but Blackstone’s Byron Wien says it may not necessarily be the contrarian indicator it usually is.  In a piece for Gulf News, Wien discusses various improvements in the U.S. economy. He also says things have improved in Europe, with policymakers now “emulating the US […]

Paulsen likes EMs, Industrials, Financials

Wells Capital’s James Paulsen says he thinks investors would be wise to look at stocks in the emerging market, industrial, and financial areas of the market. In a radio interview, Paulsen told MarketWatch’s Larry Kofsky that he thinks a resurgence in emerging market growth and growing confidence in the U.S. make those areas attractive right […]

Top Bond Managers Look for More QE

Three top bond fund manager says that a weakening U.S. economy will lead the Federal Reserve to enact “QE3” — another round of quantitative easing — and they are positioning their portfolios accordingly. “I just don’t think that we have a healthy fundamental foundation for the economy and therefore surprises are likely to be on […]

History Indicates Market Hasn’t Peaked, Says Hulbert

MarketWatch’s Mark Hulbert says that, if history is a guide, we’re not yet near the top of the stock market’s run. Citing a study from Ned Davis research, Hulbert says that historically sector performance has been a good indicator of market peaks. “The key is the average performance of the S&P 500’s sectors in the […]

Paulson Sees European Crisis Worsening

Top hedge fund manager John Paulson thinks the European debt crisis is going to worsen, thanks to continuing problems in Spain. “Mr. Paulson told investors in a call on Monday that he was betting against the creditworthiness of Germany,” the Financial Times reports, “regarded in markets as among the safest sovereign borrowers, because he saw […]

The Gurus Test Drive Auto Stocks

In his latest column for Canada’s Globe and Mail, Validea CEO John Reese takes a look at the resurgent auto industry. Reese says that the auto industry, which not too long ago was in dire straits, has made a striking comeback. And, he says, things continue to look up. “The combination of pent-up demand caused […]

Siegel Sees Market Moving Higher, But Warns Of Tax Headwind

Author and Wharton Professor Jeremy Siegel says he thinks stocks will move higher by the end of 2012, but thinks the lack of resolution regarding extensions of key tax cuts will cap the gains for the year. Siegel tells Bloomberg he thinks that resolution will come on those tax cut extensions by the end of […]

Herro on the Bond/Stock See-Saw

Oakmark’s David Herro, a Morningstar Fund Manager of the Decade, says that while investors have been loading into bonds in recent years, he’s beginning to see a shift back toward stocks. “At some point, and I think we’re already starting to see some investors budging, you will see movement out of bonds and into equities, […]

Dreman: Inflationary “Inferno” Will Crush Bonds

Contrarian strategist David Dreman says stocks are trading at their lowest values in more than two decades, and is continuing to expect an “inferno” of inflation for the U.S. “Smoldering inflationary fires will burst into an inferno once the unemployment rate falls below 7.5%, if not sooner,” Dreman wrote in a recent Forbes column. “In […]

O’Shaughnessy’s Take on Earnings

Quantitative strategy guru James O’Shaughnessy recently gave a primer on Yahoo! Finance’s Breakout on analyzing a company’s earnings and sales. O’Shaughnessy talks about the importance of net income, and why chasing companies with strong sales growth hasn’t been a winning strategy over the long haul. His bottom line: It’s the price you pay for a […]

Oberweis Delves Into Niche Markets

In his latest Forbes column, Jim Oberweis talks about how he goes about finding small-cap stocks with niche businesses for his portfolio. “To find tomorrow’s winners, my team and I start with the numbers,” he says. “Is the company organically increasing sales at a rapid rate? How about earnings per share? Niche businesses with innovative […]