Laszlo Birinyi Believes the S&P 500 is Attractive

By on November 1, 2011

Laszlo Birinyi - Birinyi & AssociatesLaszlo Birinyi was interviewed by Adam Johnson of Bloomberg regarding his current views on the market.

Birinyi is still positive on the market’s prospects, but he has tempered his bullishness from earlier this year.

Birinyi said he wanted to be a little more cautious and prudent and focus on tactics as he expects the recent volatility to last for awhile.

Birinyi said he still considers this a long term bull market which further to run. He compared the current market to the ones in 1982 and 2000 (he meant 1990) which were positive for 5 years.

When asked which index has the potential to run the most, Birinyi said “I think the S&P.” He’s concerned about the NASDAQ and the systemic risk of the over-the-counter market. He clarified by saying there are a lot of dealers and people trading for themselves. He added that the fiduciary responsibilities are not as stringent as they were some years ago.

Birinyi indicated he believed there should be more regulation on Wall Street. He gave the example of ETFs where he questioned whether they are doing what they are supposed to do citing the tracking error in some of them.

Johnson cited research from Birinyi stating since 1974 there have been 6 times the market advanced at least 14% in three weeks. In each case, six months later the average return for the market was 15%. Birinyi said, “it’s pretty powerful, six out of six works for me.” He added he wouldn’t bet the ranch on it, but one thing he likes about this market is that a lot of the positive things are defensible and a lot of the negative things are not. Birinyi thinks the tangibles come out on the side of the bulls citing earnings coming through.

Birinyi’s bullish picks include Amazon (AMZN), Mastercard (MA), and Whole Foods Market (WFM). His pans include General Electric (GE), 3M (MMM) and Goldman Sachs (GS).

Birinyi was wildly bullish earlier in the year (link).

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