Looking for The Bottom? Legg Mason’s Miller Says We’ve Hit It

Legg Mason fund manager Bill Miller — who once beat the S&P 500 for a remarkable 15 straight years before hitting an ugly patch over the past couple years — said Wednesday that “it looks as if the bottom has been made” in U.S. stocks, Reuters reports. Miller, speaking at Legg Mason’s annual luncheon for media, said that all long-term investors believe that stocks are now cheap, but he also said credit markets must regain health before the market can rally. Miller also said the Federal Reserve should buy stocks and junk bonds to help the U.S. avoid a deeper […]

Grantham: Economy Could Struggle for a While; Stocks Won’t

A couple more tidbits from Jeremy Grantham: the long-time bear who recently turned bullish tells USA Today that the economy could be in store for a lengthy period of trouble. “Grantham thinks that ‘we could have something reminiscent, in some respects, to the Japanese situation’ that began in the early 1990s and continued well into this decade — a long, low-grade deflationary recession’,” the newspaper reports. “U.S. investors in stocks and bonds may have to write off $20 trillion,” according to Grantham. “When you write off that much of your net worth, it changes your world.” But while he foresees […]

Grantham Says ’09 Analyst Earnings Estimates Much Too High

Jeremy Grantham, manager of the $100 billion investment firm GMO, believes analysts’ 2009 earnings estimates are “vastly overstated”, writes Forbes James M. Clash. “Grantham says S&P 500 earnings could easily drop 30% to $65,” Clash says, adding that Grantham “thinks the index is close to fairly priced at its Nov. 13 close of 911. But he notes that bear markets overshoot as often as bull ones do. So he guesses that the index will bottom out between 600 and 800.” Clash also delves into the trouble with analysts’ estimates, particularly during downturns, when they are slow to lower their estimates. […]

Dreman: Now Is One of Greatest Buying Opportunities of Your Life

In Forbes new “2009 Investment Guide” issue, contrarian specialist David Dreman says that now is the time to buy stocks. “Do not flee the market by selling your quality stocks,” Dreman writes. “Yes it’s the worst bear market since 2000-02, and stocks are trading at valuations not seen in decades, but equities will come back.” Dreman has been pretty bullish in recent months, but he now appears to be a making a major bull call that goes beyond specific sectors or stocks. “There is almost an endless choice of quality businesses trading at or near liquidation prices,” he says, telling […]

PIMCO’s Gross: Stocks Cheap — According to Old Standards

Bill Gross, managing director of investment manager PIMCO, says stocks are selling at very low historical levels — but only if looked at “in the context of a financed-based economy once dominated by leverage, cheap financing, and even lower corporate tax rates”. Unfortunately, Gross writes on PIMCO’s web site, “That world … is in our past, not our future”. Gross — who six years ago incorrectly predicted the Dow, then at about 8,500, would fall to 5,000 — says increased government regulation, decreased leverage, and higher taxes will hamper entrepreneurialism and innovation. He adds that he still believes in stocks […]