Joe Battipaglia: Sell-off is short-lived, stick with large-caps in tech, consumer, industrial


I just got off the phone with Joe Battipaglia, chief investment officer of Ryan Beck, who is a great guy to chat with when the stock market is plunging. That's because Joe, who isn't always 100% bullish, is usually bullish and is bullish now. He isn't at all perturbed by the now 220 point drop in the Dow (yikes! I'm almost afraid to look at it).

Here's a recap of our interview:

Amey: Joe, why is the slide today so steep?

Joe: Investors thought the Fed was done raising rates. Now the CPI is rising, so that has set investors back. That doesn't mean there will be more rate hikes. But the market has done well this year on the notion that the Fed had completed its work and now that has been taken away. So the correction is swift and it's not surprising it would be fierce.

Amey: Are you rethinking your market outlook as a result?

Joe: We're not put off by this correction. In fact we think it makes the kind of stocks we like more attractive. We've been positioned with 75% in equities, 20% in short-term fixed income (basically cash), and 5% in gold (that's been a very strong investment for us). We are betting on global growth and are more in large and mid-cap than in small-cap.

If you think about the future, it is about global growth and companies that that are going to pick up marketshare around the world. Larger companies may benefit.

Amey: I know you are a market strategist, not a stock picker, but what sectors do you like?

Joe: We like growth over value.Since we are emphasizing growth, we like consumer, healthcare, industrial and tech. We aren't as interested in financials and energy.

If you like Joe's line of reasoning, sounds like today could be a good one to add to your favorite big caps as they get cheaper. Blogging Stock names that seem to fit in with his thought process: Wal-Mart, General Electric, Microsoft, and Time Warner.

Write your questions for Joe in the comments section and we'll bring him back on Friday for an update.

Reader Comments (Page 1 of 4)

Symbol Lookup
IndexesChangePrice
DJIA-33.4512,598.55
NASDAQ-19.722,874.04
S&P 500-5.861,324.80

Last updated: May 16, 2012: 07:11 PM

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