Hulbert on Why You Shouldn’t Fear the Presidential Cycle

Conventional wisdom holds that the second year of a U.S. president’s term in office — which, for President Obama, began this week — tends to be a bad one for stocks. But in his latest MarketWatch column, Mark Hulbert says that’s a misconception, and that the “presidential cycle” likely won’t have much effect on the market this year anyway. Hulbert looks at the Dow Jones Industrial Average’s returns by presidential year over two periods: 1896… Read More

Grantham: “Almost a Certain Bet” that Blue Chips Will Outperform

It’s been well documented how “junk”-type stocks have outperformed higher-quality issues during the huge run-up since the March lows. But in his New York Times column, Mark Hulbert provides some interesting statistics that show just how wide and anomalous the gap has been — and what that means for investors. Citing data from Ford Equity Research, Hulbert says that stocks in the bottom fifth of the 4,000 the group tracks in terms of “quality” (based… Read More

“High-Quality” Picks from the Gurus

In the past two days, two of the most successful gurus I follow — GMO’s Jeremy Grantham and Gotham Capital’s Joel Greenblatt — have said that they are seeing a lot of value in “high-quality” stocks, as opposed to the junk-type stocks that have led the recent market surge. In his third-quarter letter, Grantham says that U.S. “quality stocks (high, stable return and low debt)”, are now trading at “genuine outlier levels” compared to the… Read More

Grantham Expects “Painful” Pullback in 2010

In his third-quarter letter to clients, GMO’s Jeremy Grantham offers a scathing critique of a myriad of groups whose actions (or inactions) led to the current economic climate — from regulators to homebuilders to CEOs to politicans — and says the stock market is now 25% overvalued and due for a tumble. He also reiterates his belief that U.S. “quality” stocks are the place to be, and that an emerging market bubble is looming. “Fair… Read More

Buffett, Whitman, Grantham & Others Weigh In

Kiplinger’s recently asked six top strategists to give their take on investing and where the markets are headed from here. A sampling of the responses: Warren Buffett: While he says he has no idea where stocks will head in the short term, Buffett says that “over a ten-year period you will do considerably better owning a group of equities than you will owning Treasuries. In fighting the economic war, we’ve taken action that sows the… Read More

Short-Term Opportunities, Long-Term Questions

After the huge rally in stocks over the past six months, the big question for investors is, can it continue? Fortune recently posed that question to several successful strategists, and got some encouraging answers — at least regarding the short term. After that, the waters may get choppy. “Despite some big worries about 2010, most expect the combination of market momentum and government stimulus spending to carry stocks higher for the rest of this year,”… Read More

They Got It Right in March; What Do They Say Now?

A few weeks ago, we highlighted how Jeremy Grantham — who quite presciently had advised investors to “reinvest when terrified” back in March — is now sounding much more cautious. And, according to The Wall Street Journal, Grantham isn’t the only strategist who correctly called the market’s upturn but is now feeling less optimistic. “In March, analysts who picked the bottom were a lonely lot,” writes the Journal’s Mark Gongloff. Now, he says, several of… Read More

Why Jeremy Grantham Is Bored with this Market

Just a few months after he said that equities were undervalued for the first time in two decades, Jeremy Grantham now says the broader market is again overvalued — though he sees substantial opportunities in certain areas of the market. In the GMO chief’s second-quarter letter, Grantham says that a year ago, stocks were overpriced, and a quarter ago, they were underpriced. “Now they have all — or almost all — converged for a few… Read More

Gabelli, Grantham, Gross & Others Weigh In

A number of top investment strategists offered their opinions about the market and the economy at the recent Morningstar Investor Conference in Chicago, including value fund star (and Benjamin Graham disciple) Mario Gabelli. Gabelli, whose ABC fund posted its first negative returns in 14 years last year — when it dropped just 2% — sees opportunities in the market for long-term investors. “Basically we are very simple: What will the stock market do over the… Read More

The Real Question

(Excerpted from John Reese’s May 15 Validea Hot List newsletter) The big question for the market continues to be whether or not the recent rally is for real. Given the cooling off of the past week or so, the weaker-than-hoped-for April retail sales data, and the fact that we’ve just gone through one of the steepest bounce-back inclines in history, a number of pundits are saying that the run is over. Whether they’re correct or… Read More