Decoupling or Recoupling — Which Will Win Out?

One of the troubling surprises for many investors during last year’s economic crisis was the “recoupling” of the developed world and emerging markets. Rather than offering a safe haven, emerging markets ended up being hit as hard, if not harder, than the U.S. and Europe. In the Financial Times, PIMCO Chief Executive Officer Mohamed El-Erian recently offered his thoughts on whether the future will hold decoupling or recoupling for the developed and emerging markets, an… Read More

Heebner, Doll See Opportunities

Ken Heebner, whose CGM Focus fund stumbled last year but remains at the top of its category in terms of 5-year and 10-year returns, tells CNBC that he thinks things are looking up for the economy — and, believe it or not, Ford Motor Co. “I think there’s a bigger turn in the economy coming than people are looking at,” Heebner says, citing manufacturing, inventory, and consumption data. Bob Doll, global chief investment officer of… Read More

Hulbert, the Crisis, and … Poker Hands?

In his latest column for the New York Times, Mark Hulbert examines an interesting study on buy-and-hold investing. The study — “When Everyone Runs for the Exit,” by Lasse H. Pedersen, professor of finance at New York University, concludes that it’s not traders or true long-term buy-and-hold investors who get hurt the most in a liquidity crisis like the one we’ve just experienced — it’s the investors who end up stuck in the middle. Pedersen… Read More

Mobius: Emerging Markets Due for Pullback, and then Big Surge

Templeton Asset Management Executive Chairman Mark Mobius says that emerging market stocks are due for a significant correction in the short term, but will likely soar to new highs by the end of next year. Mobius told Dow Jones Newswires that with companies’ earnings remaining weak, the recent rise in stock prices means “valuations are now relatively lofty”, and price/earnings ratios at 20 to 30 and a tenuous economic recovery will lead to investors taking… Read More

Behavior Finance Pioneer on Efficient Markets, Bubbles

Richard Thaler, the researcher whose work has brought such key behavioral finance issues as myopic loss aversion to light, says recent events have shown markets are not efficient, but that they are still the best way to employ capital. “Counting the earlier bubble in Japanese real estate, we have now had three enormous price distortions in recent memory,” Thaler wrote in The Financial Times. “They led to misallocations of resources measured in the trillions and… Read More

Siegel Fires Back on Long-Term Data

Last month, we highlighted Wall Street Journal columnist Jason Zweig’s criticism of the long-term stock return data that Jeremy Siegel has used in his book, Stocks for the Long Run. Zweig said that the data Siegel used for 1802-1870 was “rotten with methodological flaws”, saying it was cherry-picked, filled with survivorship bias, and included an estimated dividend yield that was likely too high. The criticism was big news — Siegel’s book is something of a… Read More

Fisher: It’s a Bull

Money manager and columnist Kenneth Fisher writes this month in Forbes that the bear market has indeed ended. “This rally has taken stocks up 55% from their Mar. 9 low, as measured by the Morgan Stanley All World Index. That’s far bigger than any global bear market sucker rally,” Fisher writes, reiterating his previous contention that we had been in a “reverse bubble” — a climate in which fear pushed prices down to irrationally low… Read More

Mauldin to Bulls: Not So Fast

John Mauldin, the economist and strategist from Millennium Wave Investments, isn’t buying the bullish views many strategists are now offering. In an interview with Yahoo!TechTicker, Mauldin says the market has gotten “way ahead of its fundamentals”. Mauldin says too many are trying to compare this recession to past recessions. “This recession is completely different,” he says. “It’s a deleveraging recession. …. And that’s a completely different animal.” In such a climate, he says, fundamentals are… Read More

Goldman’s Cohen Says Bull Market Has Begun

Goldman Sachs Senior Investment Strategist Abby Joseph Cohen says Goldman believes we’re in a new bull market, and that the S&P 500 should be at 1050 to 1100 by year-end. “We are beginning to see improvement, even in the labor market,” Cohen told CNBC. “We do think that the new bull market has begun. … [But] don’t expect it to look to look like a ‘V’; expect it to look like a series of upward… Read More

Are Stocks & Real Estate the Places to Be?

Known as the dean of contrarian investing, David Dreman is staying true to his against-the-tide approach, telling CNBC that he thinks stocks and real estate — two of the areas hit hardest in the past couple years — are the place to be moving forward. (Thanks goes to Value Investing Pro for posting the video.) Dreman says he thinks the stock market will be volatile but overall be “much higher” over the next three to… Read More