Laszlo Birinyi Sees a "strong economy and rapidly growing corporate earnings" Ahead

By on December 21, 2009

Jeff Sommer of the N. Y. Times presents opinions on what the market holds in the coming year by Doug Ramsey, research director of the Leuthold Group, Laszlo Birinyi, Byron Wien, and Barry Knapp, United States equity strategist at Barclays Capital.

Birinyi said bets on broad sectors or on the overall market might not be as profitable in the coming months because so many people have already adopted the gospel of index mutual funds and exchange-traded funds. Instead Birinyi recommends “bottom-up stock-picking,” preferring sector leaders Apple, Goldman Sachs, U.S. Steel, Oshkosh and Green Mountain [SMA Comment: no surprise here, since investors moving to index funds en masse would put Birinyi out of business.]

“The market is more likely to increase in value next year than decrease,” Byron Wien said. “It won’t go up in a straight line, but I expect it will go up for several years.”

Don’t just stick to the domestic market, said Mr. Ramsey at the Leuthold Group. Investors would do well if they had some money in developed foreign markets, he said, where overall valuations are now significantly cheaper than in the United States. In these markets, he said, “I think you’ve got a better chance for stronger growth.”

In the United States, at some point in 2010, the Federal Reserve will begin “draining liquidity from the financial system, as opposed to the quantitative easing that we have seen,” and interest rates will start to rise, said Barry Knapp. He added, “I would definitely avoid the Treasury market.”


N. Y. Times


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