FTSE 100 enjoys biggest monthly gain in six years
UK stocks posted their biggest monthly gain in six years, as banks and commodity producers rallied on optimism the worst of the recession may be over.
Royal Bank of Scotland and Barclays jumped 13.6pc and 9.7pc respectively as Anthony Bolton, Fidelity International's veteran equity investor, said financial shares are set to rally and ignite an equity bull market.
Kazakhmys, the mining company, rose 4.7pc after reporting an increase in production and as copper climbed. BG Group. the oil explorer, advanced after reporting better-than-expected results.
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FTSE 100 builds on last week's gains
The FTSE 100 climbed 54.12, or 1.3pc, to 4,243.71 in London. The index of leading shares has risen 8.1pc this month, the biggest advance since 2003. The FTSE All-Share Index rose 1.4 percent today.
The market is “positive for an economic turnaround”, said Joshua Raymond, a London-based market strategist at City Index.
“All major sectors are higher today so the buying we have seen has been broad and this is indicative of investor sentiment at the moment.”
The UK benchmark has rebounded 21pc from its low this year on March 3, trimming this year decline to 4.3pc, as investors speculate the pace of the economic slowdown is easing. UK consumer confidence climbed to the highest level in a year in April while a separate report today showed house prices fell 0.4pc this month, less than economists had forecast.
Bolton, president of investments at Fidelity, said that low valuations indicate recent gains that began in March are the start of a bull market. He favors financials, consumer cyclical, technology and “value stocks,” such as retailers, automakers and construction-related shares.
“All the things are in place for the bear market to have ended,” Mr Bolton said in a Bloomberg Television interview.
http://www.telegraph.co.uk/finance/markets/5252022/FTSE-100-enjoys-biggest-monthly-gain-in-six-years.html
Showing posts with label BELIEVING A BULL MARKET. Show all posts
Showing posts with label BELIEVING A BULL MARKET. Show all posts
Monday 4 May 2009
Is there a bull market around the corner?
Is there a bull market around the corner?
The FTSE100, made of up Britain's biggest companies closed last week at an 11-week high at 4,243.
By Paul Farrow
Last Updated: 8:19AM BST 04 May 2009
The stockmarket bulls have been very quiet of late, but that might be about to change. The FTSE100, made of up Britain's biggest companies closed last week at an 11-week high at 4,243 and some fund managers are beginning to talk up a bull market.
One such bull is Anthony Bolton, who is worth listening to. Mr Bolton recently stepped down from running one of the UK's most popular unit trusts, Fidelity Special Situations. The reason for its popularity was simple. Under Bolton's stewardship the fund turned an outlay £1,000 into £147,000 over a 28 year period.
Mr Bolton says that "all the things are in place for the bear market to have ended". And "when there's a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I'd like to bet against that".
There has been evidence of a recovery already - and not just because of the performance of the FTSE100. Ten funds delivered a return of more than 20pc in April alone. The top performer, F&C Private Equity trust returned a staggering 68pc, while the second best performer, Gartmore Fledgling, climbed 39pc.
But you need to tread carefully with some of these funds. They are niche, volatile and are unlikely to be suitable investments for most people.
F&C Private Equity Trust, is a fund of funds – investing funds that invest in private equity companies.
Hamish Mair, manager of F&C Private Equity Trust, said that the entire private equity sector has bounced from the unprecedented lows of late March and is confident that it will continue its recovery.
"At those levels, the market was implying that just about every listed private equity fund had problems and a good number of them were going to go bust," Mr Mair said. "Even if we are facing a severe recession, I think the collapse of the entire capitalist system – which this scenario implies – is still fairly unlikely.''
Despite the stunning performance numbers many analysts are cautious on the F&C trusts's ability to maintain its performance. The private equity sector, as a whole, is still fragile and many companies could struggle to repay bank borrowings, they said.
Gartmore Fledgling invests in the smallest companies in the FTSE All-Share – typically companies that have fallen from grace. Gervais Williams, manager of Gartmore Fledgling remains upbeat and said: "It is an astonishing portfolio of unloved, cheap companies with high yields."
The Gartmore fund holds JJB Sports, for example. Its share price was about 3p but it is now trading at 23p after it was announced its landlords and creditors had voted for a company voluntary agreement (CVA) that could secure the company's future. It also holds Pendragon, the car dealer, which has seen its share price rise from 2p to 14p in recent weeks.
Nick Sketch, an investment director at Rensburg Sheppards, the investment management company, is confident that stock markets will continue to rise and that they will be higher by the end of the year. "I do not know any of my colleagues who do not believe that markets will not be higher in two years either," he added.
Mr Sketch says the time to buy shares are when they are cheap (as they are now), but warns that it may not be an easy ride as it 'will not work out every time. "There are certain to be some hiccups along the way because of the economic uncertainty. They will be write-downs and increasing unemployment," Mr Sketch added.
Among his favourite funds for those investors in it for the long-term are SVM Global and Impax Environmental Trust (which invests in wind farms, water recycling plants and solar energy companies).
The SVM fund is a diversified fund investing in just about every asset from equities, to property to hedge funds – and has a bias towards emerging markets at the moment. "Its two fund managers have a good long-term track record. They are more cynical than most managers, which we also like," said Mr Sketch."The Impax fund has risen by 50pc over the past five years."
Steve Forbes, managing director at Alan Steel Asset Management is convinced that we are at the start of a bull market.
"Many people are doubting that the recovery in share prices is the start of the bull run – and we take that as a huge positive because the last thing we want is a consensus. The markets are shrugging off bad news, while people have few places left to put their money. Returns on cash are so poor that shares are looking an attractive alternative."
Forbes recommends overseas equity income funds because he believes that high yielding shares will do well and suggests M&G Global Dividend is worth a look. "We also like Psigma Equity Income, managed by Bill Mott, for those wanting a UK fund," he added.
But not everyone is confident shares will continue to go up and up.
Mark Dampier at Hargreaves Lansdown is unconvinced that stock markets have seen the worse. "I wouldn't rush to buy shares right now," he said. "There's plenty of talk of green shoots of recovery but the trouble is I'm not convinced there are any roots."
However, he continues to invest on the dips and says that if investors are in it for the long-term, then emerging market funds are a decent place to be. He cites Aberdeen Emerging Markets, managed by Hugh Young and JM Finn Global Opportunities, as among his favourites.
Mr Dampier will also be investing his own money in a fund launched today – the Artemis Strategic Assets managed by former 1990s star fund manager, William Littlewood.
The Artemis fund will offer a multi-asset mix, investing in equities, bonds, commodities and currencies in long and short positions, as well as cash. The fund's objective is to beat cash and the FTSE All-Share index over a three year cycle.
Mr Littlewood was a hugely popular fund manager in the 1990s until he stunned the investment fraternity when he walked away from Jupiter in 2000 suffering from burnout. His popular £1.6bn Jupiter Income Trust had returned 607pc over the previous nine years versus the average income fund which returned 270pc.
But Mr Littlewood returns to the fray in a cautious mood. He told the Telegraph: "If I am right in saying this is not an ordinary recession then investors in the short run need to be careful about equities, particularly cyclical ones. To me we are in a binary world where it is deflation today and inflation tomorrow. Unfortunately as with all investments, timing is difficult. While we stay in deflationary times shares are likely to disappoint, and a fall below the stock market lows in March should not be ruled out."
http://www.telegraph.co.uk/finance/personalfinance/investing/5271431/Is-there-a-bull-market-around-the-corner.html
The FTSE100, made of up Britain's biggest companies closed last week at an 11-week high at 4,243.
By Paul Farrow
Last Updated: 8:19AM BST 04 May 2009
The stockmarket bulls have been very quiet of late, but that might be about to change. The FTSE100, made of up Britain's biggest companies closed last week at an 11-week high at 4,243 and some fund managers are beginning to talk up a bull market.
One such bull is Anthony Bolton, who is worth listening to. Mr Bolton recently stepped down from running one of the UK's most popular unit trusts, Fidelity Special Situations. The reason for its popularity was simple. Under Bolton's stewardship the fund turned an outlay £1,000 into £147,000 over a 28 year period.
Mr Bolton says that "all the things are in place for the bear market to have ended". And "when there's a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I'd like to bet against that".
There has been evidence of a recovery already - and not just because of the performance of the FTSE100. Ten funds delivered a return of more than 20pc in April alone. The top performer, F&C Private Equity trust returned a staggering 68pc, while the second best performer, Gartmore Fledgling, climbed 39pc.
But you need to tread carefully with some of these funds. They are niche, volatile and are unlikely to be suitable investments for most people.
F&C Private Equity Trust, is a fund of funds – investing funds that invest in private equity companies.
Hamish Mair, manager of F&C Private Equity Trust, said that the entire private equity sector has bounced from the unprecedented lows of late March and is confident that it will continue its recovery.
"At those levels, the market was implying that just about every listed private equity fund had problems and a good number of them were going to go bust," Mr Mair said. "Even if we are facing a severe recession, I think the collapse of the entire capitalist system – which this scenario implies – is still fairly unlikely.''
Despite the stunning performance numbers many analysts are cautious on the F&C trusts's ability to maintain its performance. The private equity sector, as a whole, is still fragile and many companies could struggle to repay bank borrowings, they said.
Gartmore Fledgling invests in the smallest companies in the FTSE All-Share – typically companies that have fallen from grace. Gervais Williams, manager of Gartmore Fledgling remains upbeat and said: "It is an astonishing portfolio of unloved, cheap companies with high yields."
The Gartmore fund holds JJB Sports, for example. Its share price was about 3p but it is now trading at 23p after it was announced its landlords and creditors had voted for a company voluntary agreement (CVA) that could secure the company's future. It also holds Pendragon, the car dealer, which has seen its share price rise from 2p to 14p in recent weeks.
Nick Sketch, an investment director at Rensburg Sheppards, the investment management company, is confident that stock markets will continue to rise and that they will be higher by the end of the year. "I do not know any of my colleagues who do not believe that markets will not be higher in two years either," he added.
Mr Sketch says the time to buy shares are when they are cheap (as they are now), but warns that it may not be an easy ride as it 'will not work out every time. "There are certain to be some hiccups along the way because of the economic uncertainty. They will be write-downs and increasing unemployment," Mr Sketch added.
Among his favourite funds for those investors in it for the long-term are SVM Global and Impax Environmental Trust (which invests in wind farms, water recycling plants and solar energy companies).
The SVM fund is a diversified fund investing in just about every asset from equities, to property to hedge funds – and has a bias towards emerging markets at the moment. "Its two fund managers have a good long-term track record. They are more cynical than most managers, which we also like," said Mr Sketch."The Impax fund has risen by 50pc over the past five years."
Steve Forbes, managing director at Alan Steel Asset Management is convinced that we are at the start of a bull market.
"Many people are doubting that the recovery in share prices is the start of the bull run – and we take that as a huge positive because the last thing we want is a consensus. The markets are shrugging off bad news, while people have few places left to put their money. Returns on cash are so poor that shares are looking an attractive alternative."
Forbes recommends overseas equity income funds because he believes that high yielding shares will do well and suggests M&G Global Dividend is worth a look. "We also like Psigma Equity Income, managed by Bill Mott, for those wanting a UK fund," he added.
But not everyone is confident shares will continue to go up and up.
Mark Dampier at Hargreaves Lansdown is unconvinced that stock markets have seen the worse. "I wouldn't rush to buy shares right now," he said. "There's plenty of talk of green shoots of recovery but the trouble is I'm not convinced there are any roots."
However, he continues to invest on the dips and says that if investors are in it for the long-term, then emerging market funds are a decent place to be. He cites Aberdeen Emerging Markets, managed by Hugh Young and JM Finn Global Opportunities, as among his favourites.
Mr Dampier will also be investing his own money in a fund launched today – the Artemis Strategic Assets managed by former 1990s star fund manager, William Littlewood.
The Artemis fund will offer a multi-asset mix, investing in equities, bonds, commodities and currencies in long and short positions, as well as cash. The fund's objective is to beat cash and the FTSE All-Share index over a three year cycle.
Mr Littlewood was a hugely popular fund manager in the 1990s until he stunned the investment fraternity when he walked away from Jupiter in 2000 suffering from burnout. His popular £1.6bn Jupiter Income Trust had returned 607pc over the previous nine years versus the average income fund which returned 270pc.
But Mr Littlewood returns to the fray in a cautious mood. He told the Telegraph: "If I am right in saying this is not an ordinary recession then investors in the short run need to be careful about equities, particularly cyclical ones. To me we are in a binary world where it is deflation today and inflation tomorrow. Unfortunately as with all investments, timing is difficult. While we stay in deflationary times shares are likely to disappoint, and a fall below the stock market lows in March should not be ruled out."
http://www.telegraph.co.uk/finance/personalfinance/investing/5271431/Is-there-a-bull-market-around-the-corner.html
Friday 1 May 2009
FTSE recovery or a sucker's rally?
FTSE recovery or a sucker's rally?
The Daily Telegraph asks some of the City's leading experts if the FTSE bounce signals a market turn.
By Jonathan Sibun
Last Updated: 12:38PM GMT 16 Mar 2009
The FTSE-100 rose an impressive 6.3pc last week and market participants are openly questioning whether markets have reached their lows for the first time since the financial crisis began.
After weeks of gloom the scale of the surge – with the FTSE up 223 points at 3753.7, the biggest full-week rise this year – took many by surprise.
The Daily Telegraph talks to some of the City's leading experts to ask whether it is time to turn back to equities.
Anthony Bolton
Fidelity International
All of the things I look for to be in place for a market bottom were in place last week, so I think there is a reasonable chance that we have reached a bottom. A new bull market could have started.
There are three things I have looked for.
The first is the pattern of bull and bear markets. In the US, the S&P index is down 57pc from peak to trough. That is the deepest bear market but one since the early 1900s. The exception was in the 1930s but that came after huge overvaluations in the 1920s.
The second is sentiment. You would have to go back to the 1970s to see when sentiment was last this bad.
And the third is that some valuations are now compelling. There are a lot of stocks out there that are undervalued.
I don't tend to focus on the economic outlook. If you focus solely on the economy you won't see it [the bottom]. You won't see a flashing green light. By the time you see the economic indicators the equity markets will already have moved.
Edward Bonham Carter
Jupiter Asset Management
If you are asking whether this is a reasonable time to be increasing equity exposure on a three-to-five year view then the answer is yes.
However, while investors are starting to be paid to take equity risk that doesn't mean we've reached the bottom. The lesson in history is that very few people can call the bottom.
This year is likely to remain schizophrenic. You will have periods of people thinking they can see the bottom and the effects of the actions taken by governments and then periods where people believe that the economy will remain in difficulty for some time.
It is possible we could fall through the 3,000 mark but a lot of people are trying to predict the unpredictable. In bear markets, rallies are the order of the day.
Between 1966 and 1982 markets traded in a broadly sideways pattern in a range of 300 to 400 points. It is highly possible we could see that again.
Paul Kavanagh
Killick & Co
The market was due a rally. I wouldn't call it a sucker's rally but neither would I call it the bottom. I can see us getting above 4,000 but I still believe there is a long way to go before we've bottomed out. We're looking at another year of working through this.
There is sentiment around job losses which has yet to feed through. Unemployment is a lagging indicator but it will hurt sentiment if 100,000 jobs are cut a month to Christmas. Consumer spending has yet to drop off a cliff but if unemployment reaches three million there will be an impact.
Tim Steer
New Star Asset Management
We may be reaching the bottom. One justification for saying that would be that much of the refinancing that companies are going to have to do is priced into the market. The market discounts what is going to happen and it is very easy to see which companies are in need of financing and which are not.
We have already seen some companies do well from that. In a few cases companies' share prices are going up in anticipation of a rights issue. The view is that while earnings will be diluted, there will be less of a debt problem.
Garry White
Questor Editor
A market bottoms when we reach what is known as the "point of maximum pessimism". This means that investors have lost so much money they completely throw in the towel - and shares correct to an undervalued level. I don't believe we are at this level yet.
The FTSE 100 is now trading on a price-earnings multiple approaching 16 – with many more earnings downgrades likely to follow the reporting season. Some analysts believe earnings at non-financial companies may slump 24pc in 2009, this means the "real" prospective multiple of the index is much, much higher. This rally has all the marks of a bear market rally and investors should beware.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5252775/FTSEs-11-week-high-sparks-hope-that-bull-market-may-be-arriving.html
Related Articles
FTSE 100 enjoys biggest monthly gain in six years
FTSE 100 heads for biggest monthly gain in 17 years
FTSE's 11-week high sparks hope that bull market may be arriving
FTSE 100 closes the week up 6pc
Global markets search for a cure
The Daily Telegraph asks some of the City's leading experts if the FTSE bounce signals a market turn.
By Jonathan Sibun
Last Updated: 12:38PM GMT 16 Mar 2009
The FTSE-100 rose an impressive 6.3pc last week and market participants are openly questioning whether markets have reached their lows for the first time since the financial crisis began.
After weeks of gloom the scale of the surge – with the FTSE up 223 points at 3753.7, the biggest full-week rise this year – took many by surprise.
The Daily Telegraph talks to some of the City's leading experts to ask whether it is time to turn back to equities.
Anthony Bolton
Fidelity International
All of the things I look for to be in place for a market bottom were in place last week, so I think there is a reasonable chance that we have reached a bottom. A new bull market could have started.
There are three things I have looked for.
The first is the pattern of bull and bear markets. In the US, the S&P index is down 57pc from peak to trough. That is the deepest bear market but one since the early 1900s. The exception was in the 1930s but that came after huge overvaluations in the 1920s.
The second is sentiment. You would have to go back to the 1970s to see when sentiment was last this bad.
And the third is that some valuations are now compelling. There are a lot of stocks out there that are undervalued.
I don't tend to focus on the economic outlook. If you focus solely on the economy you won't see it [the bottom]. You won't see a flashing green light. By the time you see the economic indicators the equity markets will already have moved.
Edward Bonham Carter
Jupiter Asset Management
If you are asking whether this is a reasonable time to be increasing equity exposure on a three-to-five year view then the answer is yes.
However, while investors are starting to be paid to take equity risk that doesn't mean we've reached the bottom. The lesson in history is that very few people can call the bottom.
This year is likely to remain schizophrenic. You will have periods of people thinking they can see the bottom and the effects of the actions taken by governments and then periods where people believe that the economy will remain in difficulty for some time.
It is possible we could fall through the 3,000 mark but a lot of people are trying to predict the unpredictable. In bear markets, rallies are the order of the day.
Between 1966 and 1982 markets traded in a broadly sideways pattern in a range of 300 to 400 points. It is highly possible we could see that again.
Paul Kavanagh
Killick & Co
The market was due a rally. I wouldn't call it a sucker's rally but neither would I call it the bottom. I can see us getting above 4,000 but I still believe there is a long way to go before we've bottomed out. We're looking at another year of working through this.
There is sentiment around job losses which has yet to feed through. Unemployment is a lagging indicator but it will hurt sentiment if 100,000 jobs are cut a month to Christmas. Consumer spending has yet to drop off a cliff but if unemployment reaches three million there will be an impact.
Tim Steer
New Star Asset Management
We may be reaching the bottom. One justification for saying that would be that much of the refinancing that companies are going to have to do is priced into the market. The market discounts what is going to happen and it is very easy to see which companies are in need of financing and which are not.
We have already seen some companies do well from that. In a few cases companies' share prices are going up in anticipation of a rights issue. The view is that while earnings will be diluted, there will be less of a debt problem.
Garry White
Questor Editor
A market bottoms when we reach what is known as the "point of maximum pessimism". This means that investors have lost so much money they completely throw in the towel - and shares correct to an undervalued level. I don't believe we are at this level yet.
The FTSE 100 is now trading on a price-earnings multiple approaching 16 – with many more earnings downgrades likely to follow the reporting season. Some analysts believe earnings at non-financial companies may slump 24pc in 2009, this means the "real" prospective multiple of the index is much, much higher. This rally has all the marks of a bear market rally and investors should beware.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5252775/FTSEs-11-week-high-sparks-hope-that-bull-market-may-be-arriving.html
Related Articles
FTSE 100 enjoys biggest monthly gain in six years
FTSE 100 heads for biggest monthly gain in 17 years
FTSE's 11-week high sparks hope that bull market may be arriving
FTSE 100 closes the week up 6pc
Global markets search for a cure
FTSE's 11-week high sparks hope that bull market may be arriving
FTSE's 11-week high sparks hope that bull market may be arriving
Hopes that the bear market in equities is over were buoyed as shares rose and more analysts speculated we could be in the early stages of a bull market.
By Edmund Conway
Last Updated: 9:27PM BST 30 Apr 2009
The benchmark FTSE 100 index rose by 1.3pc, capping its biggest monthly increase since 2003. The market's buoyancy comes with many experts claiming that the worst of the financial crisis and market slides are now over. The FTSE dropped by more than 31pc in 2008, but has now risen back to an 11-week high of 4,243.71, despite the spread of swine flu and warnings from the International Monetary Fund that the crisis is not even half-way over.
Analysts hailed the fact that the index increased by 8.1pc this month, with a strong performance from the banking sector yesterday.
Disappointing news is just being ignored, good news is being jumped on as an excuse to get involved," said David Morrison, market strategist at GFT Global Market.
Meanwhile, Anthony Bolton, the renowned fund manager and president of investments at Fidelity International, said a bull market may have begun in March.
"All the things are in place for the bear market to have ended," he said. "When there's a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I'd like to bet against that."
A report by Barclays Wealth said the likelihood is that the world economy has avoided depression and would escape with a milder recession. Aaron Girwitz, head of global investment strategy, said: "We suggest beginning to add more risk to portfolios, and look to Asia to lead the economic revival. Credit markets will outperform as risk appetite increases.
"But we remain somewhat cautious. Market volatility will ease back only gradually. We are not urging investors to increase equity allocations to levels above their strategic norms".
However, others have warned that with many banks still needing extra capital, the crisis and the associated bear market may have longer to run.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5252775/FTSEs-11-week-high-sparks-hope-that-bull-market-may-be-arriving.html
Related Articles
UK consumer confidence rises for third month in April
Markets infected by confidence pandemic
FTSE 100 enjoys biggest monthly gain in six years
FTSE 100 heads for biggest monthly gain in 17 years
Global markets slide on banking fears
FTSE recovery or a sucker's rally?
Hopes that the bear market in equities is over were buoyed as shares rose and more analysts speculated we could be in the early stages of a bull market.
By Edmund Conway
Last Updated: 9:27PM BST 30 Apr 2009
The benchmark FTSE 100 index rose by 1.3pc, capping its biggest monthly increase since 2003. The market's buoyancy comes with many experts claiming that the worst of the financial crisis and market slides are now over. The FTSE dropped by more than 31pc in 2008, but has now risen back to an 11-week high of 4,243.71, despite the spread of swine flu and warnings from the International Monetary Fund that the crisis is not even half-way over.
Analysts hailed the fact that the index increased by 8.1pc this month, with a strong performance from the banking sector yesterday.
Disappointing news is just being ignored, good news is being jumped on as an excuse to get involved," said David Morrison, market strategist at GFT Global Market.
Meanwhile, Anthony Bolton, the renowned fund manager and president of investments at Fidelity International, said a bull market may have begun in March.
"All the things are in place for the bear market to have ended," he said. "When there's a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I'd like to bet against that."
A report by Barclays Wealth said the likelihood is that the world economy has avoided depression and would escape with a milder recession. Aaron Girwitz, head of global investment strategy, said: "We suggest beginning to add more risk to portfolios, and look to Asia to lead the economic revival. Credit markets will outperform as risk appetite increases.
"But we remain somewhat cautious. Market volatility will ease back only gradually. We are not urging investors to increase equity allocations to levels above their strategic norms".
However, others have warned that with many banks still needing extra capital, the crisis and the associated bear market may have longer to run.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5252775/FTSEs-11-week-high-sparks-hope-that-bull-market-may-be-arriving.html
Related Articles
UK consumer confidence rises for third month in April
Markets infected by confidence pandemic
FTSE 100 enjoys biggest monthly gain in six years
FTSE 100 heads for biggest monthly gain in 17 years
Global markets slide on banking fears
FTSE recovery or a sucker's rally?
Saturday 21 February 2009
When Will The Next Bull Market Begin?
DOW JONES INDU AVER...(.DJIA)
7365.67 -100.28 (-1.34%%)
Dow
Thursday, 19 Feb 2009
When Will The Next Bull Market Begin?
Posted By: Lee Brodie
When Will The Next Bull Market Begin?
Posted By: Lee Brodie
When will the next bull market begin? Celebrated investor Doug Kass reveals his prediction to Fast Money -- and what he says just might surprise you!
As you might know Doug Kass is one of the Street's gloomier market prognosticators. But what you might not know is that in an article Kass penned for TheStreet.com called Fear and Loathing on Wall Street Kass wrote, “although it will likely take time for our country to turn around…..there are some early signs of stability/revival.”
That’s right, big bear Doug Kass thinks we might be in the earliest stages of recovery. We found the premise so intriguing that we invited him to join us on Fast Money to expand on his thesis.
Essentially he tells us that there's so much pessimism in the market that you should feel hopeful. Kass says, “as we move into the midway point of the second month of 2009, market participants generally now have the opposite point of view of 14 months ago.”
In other words bearish sentiment is widespread.
“It's so bad out there that some are questioning whether the world's economies will ever recover from the current mess. In doing so, they seem to be ignoring not only an emerging valuation opportunity but a number of events that should conspire to bring us out of the abyss.”
He thinks investors aren’t giving proper weight to the stimulus, the TARP, the foreclosure plan and whatever else the government may do to assuage the crisis. Typically we spend our way out of a recession and these spending initiatives are unprecedented. If the fundamentals of finance hold true, these programs should work.
“My sense is that we don't have to wait (too much longer) for a resumption of a new bull market as policy is going to be aggressive and immediate."
In a nutshell Kass thinks the economy could turn around as early as next year. “I expect (the recession), which began in November/December 2007, to end in early 2010, or about 12 months from now.”
Considering he’s a celebrated bear – and considering some of the dire predictions that are out there – that's not so bad. In fact, that's not so bad at all!
What’s the trade?
“I think you still have to tread carefully,” he tells us. But he also says he’s optimistic about growth in China. As a result he tells the traders to take a hard look at materials and oil services stocks such as Transocean [RIG 59.52 -0.10 (-0.17%) ] and Freeport McMoran [FCX 28.78 0.51 (+1.8%) ].
http://www.cnbc.com/id/29284507
As you might know Doug Kass is one of the Street's gloomier market prognosticators. But what you might not know is that in an article Kass penned for TheStreet.com called Fear and Loathing on Wall Street Kass wrote, “although it will likely take time for our country to turn around…..there are some early signs of stability/revival.”
That’s right, big bear Doug Kass thinks we might be in the earliest stages of recovery. We found the premise so intriguing that we invited him to join us on Fast Money to expand on his thesis.
Essentially he tells us that there's so much pessimism in the market that you should feel hopeful. Kass says, “as we move into the midway point of the second month of 2009, market participants generally now have the opposite point of view of 14 months ago.”
In other words bearish sentiment is widespread.
“It's so bad out there that some are questioning whether the world's economies will ever recover from the current mess. In doing so, they seem to be ignoring not only an emerging valuation opportunity but a number of events that should conspire to bring us out of the abyss.”
He thinks investors aren’t giving proper weight to the stimulus, the TARP, the foreclosure plan and whatever else the government may do to assuage the crisis. Typically we spend our way out of a recession and these spending initiatives are unprecedented. If the fundamentals of finance hold true, these programs should work.
“My sense is that we don't have to wait (too much longer) for a resumption of a new bull market as policy is going to be aggressive and immediate."
In a nutshell Kass thinks the economy could turn around as early as next year. “I expect (the recession), which began in November/December 2007, to end in early 2010, or about 12 months from now.”
Considering he’s a celebrated bear – and considering some of the dire predictions that are out there – that's not so bad. In fact, that's not so bad at all!
What’s the trade?
“I think you still have to tread carefully,” he tells us. But he also says he’s optimistic about growth in China. As a result he tells the traders to take a hard look at materials and oil services stocks such as Transocean [RIG 59.52 -0.10 (-0.17%) ] and Freeport McMoran [FCX 28.78 0.51 (+1.8%) ].
http://www.cnbc.com/id/29284507
Thursday 8 January 2009
BELIEVING A BULL MARKET
BELIEVING A BULL MARKET
When markets are rapidly rising, value investing invariably falls out of favor with the investing public. In an upward racing market, value stocks appear dull and stodgy as the more speculative issues rush toward new market highs. But come the correction, it all looks different. Stable value stocks seem like trusted friends.
Most bull markets have well-defined characteristics. These include:
When markets are rapidly rising, value investing invariably falls out of favor with the investing public. In an upward racing market, value stocks appear dull and stodgy as the more speculative issues rush toward new market highs. But come the correction, it all looks different. Stable value stocks seem like trusted friends.
Most bull markets have well-defined characteristics. These include:
- Price levels are historically high.
- Price to earnings ratios are high.
- Dividend yields are low compared with bond yields (or compared with a stock’s particular dividend yield pattern).
- Margin buying becomes excessive as investors are driven to borrow to buy more of the high-priced stocks that look attractive to them.
- There is a swarm of new stock offerings, especially initial public offerings (IPOs) of questionable quality. This bull market is what investment bankers and stock promoters call the “window of opportunity.” Because IPOs so often occur when Wall Street is primed to pay top dollar, seasoned investors joke that IPO stands for “it’s probably overpriced.”
THRIVING IN EVERY MARKET
Value Investing Made Easy (Janet Lowe):
- THRIVING IN EVERY MARKET
- MR. MARKET
- SUITABLE SECURITIES AT SUITABLE PRICES
- PAYING RESPECT TO THE MARKET
- TIMING VERSUS PRICING
- BELIEVING A BULL MARKET
- THE PAUSE AT THE TOP OF THE ROLLER COASTER
- MAKING FRIENDS WITH A BEAR
- BARGAINS AT THE BOTTOM
- SIGNS AT THE BOTTOM
- BUYING TIME
- IF YOU ABSOLUTELY MUST PLAY THE HORSES
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