Byron Wien’s Advice on Sectors to Accumulate and Avoid

By on February 27, 2013

Byron Wien - BlackstoneByron Wien, Blackstone Advisory vice chairman, overseeing $210 billion of assets under management, was on Fox News a couple of days ago contributing his perspective on various stock market sectors and gold.

Wien said at the beginning of the year he was cautious based on his view profits were going to be squeezed and his estimate that S&P earnings would be down for the year.

The consensus view of earnings being up about 10%, along with a fiscal cliff deal and enormous monetary easing caused the market to jump in January, according to Wien. This, despite fundamentals that were mixed, Wien added.

Wien said he expected the 2% payroll tax holiday ending would affect consumer spending, and the sequester would reduce government spending.

Wien said there will be parts of technology that’ll do well and he particularly liked some pharmaceutical companies, which he wouldn’t name.

Regarding sectors he would avoid, Wien mentioned financials and energy. He believes the price of oil will decline below $80 since North America is moving toward self sufficiency and enormous amounts of oil are being drilled in Iraq. On this basis Wien said he would avoid energy companies because oil is definitely going down.

Wien discussed his opinion on gold as an insurance policy which investors will benefit from during times of volatility and the reality of the enormous monetary expansion from the world’s central banks which is debasing currencies. In this environment Wien said, “you’re going to want to own something real; gold is real.”

Earlier this month, Wien said he was expecting a substantial stock market correction [link].

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