Hulbert’s Top Market Timers – What They See Ahead

By on January 18, 2010

According to Mark Hulbert, the five best market timers are all bullish.


*Blue Chip Investor (Steven Check) — Bullish. To be sure, Check is not a short-term market timer. But he does vary the amount of cash in his newsletter’s model portfolio, and currently he has allocated just 0.6% to cash. Furthermore, Check maintains a market timing model based on the difference between the stock market’s price/earnings ratio and the yield on triple-A rated corporate bonds. Based on the issue of his newsletter published earlier this week, that model currently rates the stock market as being “undervalued,” though not “extremely undervalued” as it was one year ago.

*Bob Brinker’s Marketimer (Robert Brinker) — Bullish. In his latest issue, published earlier this week, in which he reported that his market timing model is bullish and his model portfolios are fully invested, Brinker wrote: “Our indicators suggest that a new cyclical bear market decline in excess of 20% is not likely to begin during the winter season. While it is true that cyclical bull market corrections can occur at any time, we would regard any such pullback as a health restoring event if it were to occur in the weeks ahead. Cyclical bull market corrections are usually contained with a range of five to ten percent, and are followed by significant rallies to new cyclical bull market highs.”

*The Chartist & The Chartist Mutual Fund Letter (Dan Sullivan) — Bullish. In his latest issue, written in late December, Sullivan wrote: “We’re betting that the bull market will remain intact over the next year. That’s our best guesstimate, but in all candor, we really don’t know what the market is going to do over the next 12 months or 6 months or, for that matter, 3 months; and nobody else knows either.” Until his models turn bearish, however, Sullivan’s model portfolios remain fully invested.

*Fidelity Independent Adviser (Donald Dion) — Bullish. Dion does not hazard a prediction about the stock market’s trend for all of 2010, preferring instead to write that the year will test the stock market’s “strength and stamina.” In the meantime, however, Dion is keeping his equity-oriented model portfolios fully invested.

*Fidelity Sector Investor (James Lowell) — Bullish. In his latest letter, published earlier this week, Lowell wrote: “I think 2010 will be another 20% gainer,” though he also predicts that such a belief “will be hard to hold as we hit the troughs that 2010 has in store for us.” Lowell’s so-called Market Masters Portfolio is 87% invested in various Fidelity sector funds, with the remaining 13% invested in a foreign stock fund.

SMA Comment: From a contrarian perspective, such a bullish consensus recommending a 97% long position in equities presents a truly scary prospect for those hoping for higher stock prices.

Source: Barrons

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