After Getting It Right On Way Down, Ned Davis Now Turning Bullish

Ned Davis Research — one of the few investment companies that called for clients to move away from stocks well before the recent crash — is now calling for clients to shift more money back into equities, the Los Angeles Times’ Tom Petruno writes. Davis, which had cut its recommended portfolio stock weighting from 55% to 50% in July 2007 and down to 40% in January 2008, is now recommending clients reweight their portfolios so… Read More

Miller: “I Was Naive”

Once-revered Legg Mason fund manager Bill Miller, who has been hit harder than perhaps any high-profile fund manager during the recent market plunge, tells The Wall Street Journal that he was “naïve” in believing that so many prominent companies couldn’t be done in by the credit crisis. “The thing I didn’t do, from Day One, was properly assess the severity of this liquidity crisis,” Miller told the Journal’s Tom Lauricella. Miller beat the market in… Read More

Berkowitz: We’re in a “Bargain Hunter’s Dream”

Fairholme fund manager Bruce Berkowitz — who has weathered the recent market storm with much better results than many of his value peers — tells Kiplinger’s that the recent market plunge “has been a blessing”. “We’ve been buying companies at prices that even when I was in my most pessimistic mood, I didn’t think we would see so quickly,” Berkowitz told Kiplinger’s Manuel Schiffres. “These are 1974-type valuations, and what’s fascinating is that stocks fell… Read More

O’Shaughnessy: Leverage Responsible for Downturn but Stocks are “Compelling”

In a recent Reuters article, James O’Shaughnessy, chief investment officer of O’Shaughnessy Asset Management, says that lofty amounts of leverage was one of the major reasons for the current bear market and recession. But, O’Shaughnessy said that “stocks are now at their most compelling valuations since 1982. And Wall Street can come back too, with a modicum of temperance.” In September of this year, O’Shaughnessy wrote an excellent piece on this web site. The report,… Read More

Steinhardt: “Good Cyclical Time” to Buy

Michael Steinhardt, the well regarded manager of the Steinhardt Partners hedge fund (which closed down in 1995), believes that now is a “good cyclical time to invest in equities”. Speaking at the Reuters Investment Outlook Summit, Steinhardt seemed to play both sides of the fence, saying that he doesn’t think we’ve seen a bottom in stocks but that he wouldn’t be surprised if this was the bottom. Regardless of trying to call a bottom, the… Read More

Small Caps Leading the Surge

Today we came across some interesting research by Bespoke Investment Group that showed the recent performance of stocks across the ten size-based deciles that make up the S&P 500. The index is up about 20 percent off its Nov. 20 lows, but according to Bespoke, “the average stock in the S&P 500 is up even more at 27.32%. This is because the smallest stocks in the index have outperformed their larger cap brethren … The… Read More

Ritholtz: Significant Rally “Waiting To Happen”

Barry Ritholtz of The Big Picture financial blog — a recent bear who saw the credit crisis coming — tells Barron’s that “there is a significant rally, 20% or 30%, waiting to happen.” But, he adds, “There’s also the possibility of a lower low, as we get deeper into the recession, if things take a terrible turn for the worse.” Asked which scenario will play out, Ritholtz, who is also CEO of Fusion IQ investment… Read More

Heebner & Muhlenkamp making gutsy moves into financial stocks

Ken Heebner, manager of CGM Focus fund, is warming up to financial stocks according to this WSJ article. Heebner, who has one of the best performing mutual fund records over the last decade, has been loading up on financials. According to his fund’s Sept. 30 portfolio report, the fund held 40% in financials although the current exposure is not as high. He uses two lesser known metrics when analyzing finance companies. One is the “price-to-tangible… Read More

CFA Panelists: Economic Bears, Stock Market Bulls

The CFA Institute held its Global Financial Crisis Roundtable Thursday, with institutional expert Theodore Aronson, Goldman Sachs’ Abby Joseph Cohen, bond expert Martin Fridson, and economist Jason Trennert speaking in a panel discussion moderated by The Wall Street Journal’s Jason Zweig. U.S. News & World Report’s Kirk Shinkle offers the following observations from the hour-plus discussion: “Cohen made it clear she thinks that many (though not all) markets have fallen enough to make new opportunities… Read More

Reese: Five Hot Stocks With Staying Power

In his latest column for Forbes.com, Validea CEO John Reese takes a look at what stocks have actually been among the biggest gainers while the market has plunged in the past couple months. These stocks can be awfully tempting for investors, who are trying to latch on to any sort of positive market vibes amid this difficult climate. But, Reese cautions, buyers should beware: “Blindly following hot stocks can get you in trouble,” he says,… Read More