Monthly Archives: September 2010

BlackRock’s Doll Talks QE2

Blackrock’s Bob Doll says a number of factors are pointing toward stocks grinding higher.

In an interview with CNBC, Doll says one of those factors involves Federal Reserve policy. He thinks the probability of the Fed engaging in more quantitative easing has risen recently, and that is good news for the stock market in the short term.

“I think in the near term that’s got to be viewed as positive for equities,” he said. “We know what [quantitative easing] has done to the dollar. We know what it’s done to the price of gold, it’s likely positive for risk assets — the hope has to be that all translates to better news for the real economy and the nominal economy.”

Global Value Picks Buffett, Graham & Lynch Might Like

In his latest article for, Validea CEO John Reese says the high levels of fear in the market are creating a variety of opportunities around the globe for disciplined value investors.

“A double-dip recession, tax hikes, a U.S. budget crisis, a European debt contagion — these are just a few of the fears now dogging investors, many of whom are still reeling from the 2008 financial crisis and market crash,” writes Reese. “But for good value investors — strategists like Warren Buffett, Benjamin Graham, and other greats upon whom I base my Guru Strategies — times of fear are also times of opportunity. And right now, thanks in part to overblown fears of oncoming disaster, my models are finding opportunities in U.S.-traded shares of companies from all around the globe.”

Reese takes a look at three Guru Strategy-approved picks, one each from China, India, and Europe. To read the full article, click here.

Economy Isn’t Out of Woods, Hussman Warns

While the National Bureau of Economic Research recently declared that the so-called Great Recession ended in June of 2009, John Hussman says that doesn’t mean the economic pain is over.

In his latest market commentary for Hussman Funds, Hussman says that data cited by NBER itself shows that we may already be headed back into another recession. “If we had good reason to expect positive economic tailwinds, we would be less concerned about the present deterioration” in economic indicators, Hussman says. “Unfortunately, my impression is that the bulk of the growth that we did observe coming off of the June 2009 economic low was driven by a burst of stimulus spending coupled with a variety of programs to pull economic activity forward. My concern is that these synthetic factors are now trailing off, with little intrinsic economic activity to carry a recovery forward.”

Hussman says his valuation metrics “suggest clear overvaluation” for the market. He says both his funds are taking very defensive positions.

Gross: New Normal Is Real; Look Outside U.S. for Opportunities

PIMCO’s Bill Gross is standing by his contention that we’re in a “New Normal” for the economy and stock market, saying that investors shouldn’t expect double-digit returns from a stock/bond portfolio going forward. Gross tells CNBC that investors should look outside the U.S. for the best opportunities, keying on countries that have non-dollar currencies and higher growth prospects.

Paulson: Buy a House — and then Buy Another

Hedge fund guru John Paulson is continuing to bet on big-time inflation hitting the U.S., and as a result is keying on equities, gold, and real estate.

Forbes’ Robert Lenzner reports that Paulson, speaking at the University Club in New York, said double-digit inflation will hit by 2012, pounding the bond market and strengthening equities. Among the stocks he likes: Johnson & Johnson, Citigroup, and Coca-Cola.

Paulson also sounded very bullish on housing. “If you don’t own a home buy one,” he said. “If you  own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.” He said people should issue 30-year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”

Guru Strategy Upgrades/Downgrades: Garmin Rising, Vodafone Falling

Each week, we take a look at which stocks John Reese’s Guru Strategy computer models have newfound interest in, and which they have soured on. Here’s a look at some of the stocks John’s strategies have upgraded or downgraded today. Among the big-name movers: Vodafone and Garmin.

Fisher: New Normal Concept Is “Idiotic”

While many have been talking about — and fearing — a “New Normal” of slower growth for the U.S. economy and stock market, author and top money manager Kenneth Fisher says the notion is “idiotic”.

Speaking at the Forbes Global CEO Conference in Sydney, Fisher said things aren’t so different this time around. “We are chimpanzees with no memory,” he said, according to Bloomberg. “The next 10 years are going to be just as good as the 1990s. The problems in this current environment we think are so different, and so new and so unique. It’s the same stupid old normal we’ve always had. We’ve got a great future.”

Fisher, who has an excellent long-term track record despite some off-base market calls during the financial crisis, added, “We can quibble about details, but right now, we’ve got the world snarky, skeptical, pessimistic, which is normal a year and a half after the bottom of a big bear market. It’s what we always get.”

Fisher also offered his take on the potential revaluation of the Chinese Yuan.

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