On Monday, fund manager Steve Leuthold, who cleaned up last year by betting against the US stock market, turned bullish, predicting that the S&P 500 would soar to $1,100 this year.Now, his London counterpart who cleaned up shorting British banks in 2008 is making a similarly bullish call. Hedge fund manager Crispin Odey told investors (subscription required) in his monthly report that things are looking up: "Stock markets have shot up, led by the financials and the base material sectors. Opinion is divided over whether this is a bear market rally or the beginning of a new bull market. I think it has the chance to be a new bull market."
"As the story moves from the balance sheet to the earnings potential for the likes of Barclays, the bull market will also extend from its narrow base to encompass other industries where capacity has been sufficiently reduced as to allow pricing power to come through," he added.
And, finally, this gem: "Since on my numbers these banks are trading on between two and three times future earnings, two years out, I am not afraid of the volatility in the share price." (emphasis added)
That's the most important takeaway for investors: If you have a strong stomach and can find good companies trading at great valuations, the worry over the market's volatility presents a buying opportunity.
So there you have it: Two people who got rich with bearish bets turning around and "voting for the market after the voted against it." It's a lot more compelling than listening to the permabulls screaming that the market has bottomed.
Closing Bell: Dubai sends jitters throughout the market (S, BBY)
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
Reader Comments (Page 1 of 1)
4-16-2009 @ 1:22PM
clikdawg said...
Used to live in a big old Rust Belt city -- major league baseball, world-class symphony, yadda-yadda-yadda and like that --
And horse racing.
And we had us a Racing Tout wrote a column for the big local daily newspaper.
At the beginning of each racing season (or so we were told) this Tout was given $1,000 of the paper's money to bet on ponies; he'd publish his picks so we could take advantage of his wisdom, and then report the results.
Oddly enough (for the column went on year after year) the Tout blew the grand every year -- often by midseason.
Even more strangely, folks continued to bet his picks, hoping that at least one of them would produce a Major Payday ... after all, he was a Genu-wine, Died-in-the-Wool Expert, no? Or he wouldn't be writing a newspaper column, right?
'Course, there's no telling if he was actually given the money; if he actually put it on the ponies he said he did; if he actually put his OWN money on those ponies; or if the whole thing was just a cute ploy to manipulate the odds on certain races.
Oh, yeah -- one more thing: I once got to know this stable lad down Louisiana way, who delighted in regaling me with all the methods he and other stable boys used to dope horses before a race; always to order, you understand, so it was OK.
"B-b-b-but," I stammered. "You mean those races are f-f-f-FIXED?"
He looked at me with that half-friendly, half-pitying look that Those In The Know give ordinary mortals and said (not unkindly):
"What planet you from, cher?"
Let those with ears hear ...
4-16-2009 @ 1:32PM
Iridium said...
Only the beginning of another Bullsh** rally just like the Dotcom rally and the credit bubble rally. Or like the commodity rally.
All built on nothing other than pure speculation. The market is built on total lies and "creative" accounting. Things that would put a normal person in jail.
There isn't a single fundamental in the real economy that points to any reason for the market goign up 20% in a few weeks.
I saw a great little story on CNBC this morning how emerging markets are going to take off like wildfire this year. This will fuel the growth for the global economy. There was no mention of exactly how this would happen, just massive speculation. That is all the market needs though, speculation based on thin air.
Wall Street is a casino. Buying a stock right now is just like playing a hand of blackjack. The funny thing is that the big time players want it that way. See they have rigged the games and hold aces up thier sleeves.
4-18-2009 @ 7:25AM
Jt said...
I'm with clickdawg ... love that story