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 just don’t think it’s gone far enough. Europe is still a shipwreck, and the U.S. economy has drifted into this soft patch.”

Biggs says he’s taken short positions on the German and French stock markets, but says he doesn’t think the U.S. will have a double-dip recession. He’s heavily invested in technology stocks, and also owns oil service and industrial machinery stocks. And he’s maintaining his positions in China, he adds.

Biggs Sees Pullback, Then Continued Market Gains

Hedge fund guru Barton Biggs says he’s cut back on his stock holdings, largely thanks to concerns about Europe — particularly Spain. Biggs also tells Bloomberg that the Federal Reserve’s seeming reluctance to perform further quantitative easing also has him less bullish. But Biggs says that while he’s looking for a 5% to 7% pullback in the short term, he sees stocks moving higher in the next few months with some good longer-term bullish factors in place.

Biggs Getting More Bullish

Hedge fund guru Barton Biggs has been increasing his exposure to stocks, saying that their relative attractiveness compared to bonds and fixed-income investments will drive investors toward them.

“I’ve been gradually increasing and I’m up to 90 percent [long on stocks] now,” Biggs said on Bloomberg Surveillance with Tom Keene. “There is an awful lot of money that is out of stocks and in very low- yielding fixed-income instruments. I think the odds are that money is going to migrate back.”

Biggs says one risk to the markets involves the tensions in the Middle East. If Israel were to “take a shot” at Iran, it “would be very, very serious for the world economy and would cause a double dip,” he told Bloomberg.

Biggs Bullish, But Cautious

Hedge fund guru Barton Biggs says he’s bullish on stocks, “assuming that the world holds together”. Biggs says he’s still very nervous about the lack of progress regarding Europe’s debt crisis, and says the demise of the Euro would cause an economic “Apocalypse”. He adds that he’s “running a moderate net long of about 65%” with his portfolio.

Biggs Turns Bearish, Citing “Pathetic” Supercommittee Effort

Hedge fund guru Barton Biggs has turned bearish, saying he thinks the odds of a recession in the first half of 2012 have increased to about 60%-70%, and that the “current spurt in the U.S. economy … is going to fade as we get into next year.” Biggs tells Bloomberg that the apparent failure of the U.S. deficit-reduction supercommittee and the continuing trouble in Europe are behind his change in tune. He thinks we’ll see the stock market decline “at least back to the lows of last summer, and God forbid maybe even a testing of the lows of 2008-2009,” though he adds, “nothing is certain”. He says he won’t be net short in his portfolios, but will be “in a pretty neutral position”.

 

 

 

Biggs: “Rally Going to Continue for a While”

Hedge fund guru Barton Biggs, who had been reducing equity exposure late in the summer months, has recently reversed course and has continued to up his exposure since the announcement of the new plan to stem Europe’s debt crisis. 

“This morning, all of the wise men of Europe and the economists are very negative about this European deal that was worked out last week,” Biggs tells Bloomberg. “The general feeling is that the right thing to do is to cut back on risk and that it is going to be a flop, and that all they did was kick the can not very far down the road again. I am inclined to feel differently.” He says that there is “a tremendous amount of money that’s trapped out of stocks”, and that the rally is “going to continue for a while.”

Biggs had reduced his net exposure to equities to about 20% in September. But by mid-October, it was up to 65%, and now it is at 80%, Bloomberg reports. He’s particularly high on certain tech sector and industrial sector picks.

Biggs High On Cash Amid Fear of Financial Crisis

Hedge fund guru Barton Biggs says he’s only 20% net long on equities in this market, and says we may be on the eve of another financial crisis. Biggs says policymakers have tools at their disposal to help, but have failed to come together to do so in Europe or the U.S. “In times like this, there’s nothing the matter with cash,” Biggs says. “I don’t think any place is a place to invest right now.” He adds that “When there is clarity, and when the authorities move and do something, emerging markets will be a fabulous place to invest. … But I’m not ready to make that bet yet.”

Biggs Likes “Old” Tech Stocks; Wary of Financials

Hedge fund guru Barton Biggs says he’s continuing to find opportunities in the stock market right now, though he’s not too bullish on financials. Biggs tells Bloomberg that worries about further housing-related writedowns and questions about the legitimacy of their book values make financials a question mark. One area he likes: “older” tech stocks like Intel and Cisco, which he says are now “incredibly cheap”.

Biggs Bullish, Despite Slowing Economy

Hedge fund guru Barton Biggs says the economy has slowed, but he remains bullish on U.S. stocks.

“The U.S. and the global economy have clearly slowed pretty significantly,” Biggs tells Bloomberg Surveillance. “That’s arousing the bears, who believe we’re going to slip back into a long soft patch at best or maybe even a double-dip at worst. For a number of reasons I don’t think that’s right.”

Biggs says investors are overreacting to news like the European debt crisis and the recent drop in housing starts, which was weather-related. One area he likes is large U.S. industrials. “I don’t see anything the matter with Deere and Caterpillar and the big American industrial companies, and in terms of valuation they’re still very reasonable,” he said.

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Biggs Likes Manufacturers, Capital Equipment Stocks

Hedge fund guru Barton Biggs says he has more confidence in the U.S. market than other markets around the world. “We’ve been through a period here where the bull case for the global economies has definitely weakened in the last week or so,” Biggs recently told Bloomberg. “[But] I still feel good about the U.S. market.” Biggs says the U.S. market puts investors on a more level playing field than those of other countries. He also says the recent decline in commodity prices should help the U.S. economy. He likes capital equipment stocks and manufacturing stocks, such as Caterpillar and Deere.