Interesting Observations From the Barron’s Roundtable

By on January 18, 2012

The first round of Barron’s 2012 Roundtable was presented this week. Opinions on the economy and stock markets around the world were expressed from 10 panelists (Scott Black, Abby Joseph Cohen, Marc Faber, Mario Gabelli, Bill Gross, Fred Hickey, Brian Rogers, Meryl Witmer, Oscar Schafer, and Felix Zulauf).

Fred Hickey believes the secular bear market in technology, which has lasted 12 years, is coming to an end. He noted the low PE’s of Hewlett Packard (8x), Intel (10x) and Microsoft (10x).

Marc Faber predicted that WWIII will occur sometime in the next five years with the Middle East blowing up. He sees Chinese power increasing and the only way for the west to control it is through the, “oil tap in the Middle East.” This provocative comment stirred all kinds of speculation by several of the roundtable members.

In this Barron’s issue, Faber provided his investment choices for the coming year along with his rationale for the picks. He was long several multi-nationals (ex. Total, Pfizer), a number of Singapore and Hong Kong stocks, and short IBM and Salesforce.

Both Faber and Abby Joseph Cohen believe oil prices will be firm based on current low per capita consumption in India and China, which is growing.

Felix Zulauf predicted the world economy will experience, “a brutal slowdown.”

Oscar Schafer provided his picks for the coming year. He said he invests in companies whose cyclical exposure is misunderstood. He was high on United Rentals which had announced the acquisition of its largest competitor. Schafer added three other picks to his list which included Walgreens which he pointed out has demographic tailwinds. He commented on Walgreen’s difficulties with Express Scripts, which had resulted in the stocks’ weakness, but predicted a deal would eventually come.

According to Pundit Tracker, a new site whose goal is to track pundits in several fields, the Barron’s roundtable had an impressive record of predictive ability over the past 10 years led by Marc Faber and Felix Zulauf.

Source: Barron’s Magazine

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