The Views of Three Bulls and One Bear
Laszlo Birinyi, Barton Biggs, and Steve Leuthold are bullish on the prospects for the stock market while Jeremy Grantham takes the opposite side as reported by Rita Nazareth and Whitney Kisling in a BusinessWeek article:
Birinyi says the 69% gain for the Standard & Poor’s 500-stock index since the Mar. 9 low last year is just the beginning of a bull market that may last through the next Presidential election. Two other prominent market players who were bullish last March, Barton Biggs of Traxis Partners and Leuthold Group founder Steve Leuthold, share his optimism, saying stocks will advance as the economy gains momentum and the fastest corporate earnings growth since 1994 persuades investors to shift into stocks from bonds.
Jeremy Grantham is among those who see trouble ahead. Grantham, 71, whose firm manages $101 billion, says fair value for the S&P 500 is 875, or 24% below the Mar. 10 close. The figure is based on his calculation of historic price-earnings multiples, weighted to smooth out swings in profit margins. Grantham predicts that the deflating of the credit bubble will be a drag on the economy.