Values Abound in Small-Caps

In this week’s Validea Hot List newsletter, John Reese says that his Guru Strategy computer models are finding an array of values among small-cap stocks, particularly among those that would be considered small-cap growth firms. Reese’s Hot List portfolio added eight new stocks on his regularly scheduled rebalancing, all but one of which are in the small-cap growth category — one of the market’s most beaten-down areas of late. For 2008, Reese notes, small-cap growth… Read More

They Saw The Trouble Coming — And Some See More Ahead

Kiplinger’s takes a look this week at nine people who “called it right” in predicting the credit crisis and market collapse, and asks what they see coming for the year ahead. Some — like Jeremy Grantham, Robert Rodriguez, and Nouriel Roubini — are people whose opinions we’ve detailed in past posts, but here’s a look at the predictions (most of which have to do with the economy, not the stock market) for some of the… Read More

Arnott Sees Huge Opportunities in Bonds

Add Robert Arnott to the list of well-known previously bearish investment managers who are seeing value in the market. “I like investments, if I’m getting paid to bear risk,” Arnott tells Brian Milner of Canada’s Globe and Mail. “And right now, this is one permabear who is strongly bullish on a wide array of markets.” Among those areas are a number of bond markets, including investment-grade and high-yield corporates; emerging-market debt, and inflation-protected government bonds.… Read More

Barron’s: Wall Street Strategists See Market Gains in 2009

The 2009 stock market and earnings estimates are starting to roll in, and this week’s Barron’s kicks off the race as it discusses where top Wall Street strategists think we’ll end the year – both in terms of earnings and the market level on the S&P 500. Twelve market experts, including Bob Doll of BlackRock and Richard Bernstein of Merrill Lynch, were polled and on average these pundits expect the S&P to gain 18% in… Read More

Royce on Long-Term Possibilities, More Bank Closures, and Margin of Safety

Chuck Royce, chief investment officer of The Royce Funds, tells that he sees “tremendous” possibilities in the stock market over the next three to five years, and says that America will make it through the current financial crisis and have a “wonderful” future. “I think that we are a major — we can’t forget this — we’re a major world power,” Royce told Steve Forbes. “And although the dollar has definitely had its issues… Read More

Pimco’s El-Erian: Beware of Value Traps, Seek Catalysts

Pimco Co-CEO Mohamed El-Erian tells CNBC that “every investor should go back to the basics” in 2009. According to El-Erian, investors need to focus on “diversified asset allocation, good implementation vehicles, and solid risk management”. El-Erian believes equities could lag until investor confidence improves and warns that some investments could be value traps — meaning their attractive valuations alone aren’t enough reason to invest in them and that they could fall further. Instead he says… Read More

Bogle: Earnings Will Come Back Strong

John Bogle, founder of The Vanguard Group, tells PBS’ Darren Gersh that he expects corporate earnings will come back stronger than the 5 percent average growth they’ve exhibited over the past century as they revert toward their mean. Bogle didn’t say exactly when he expects the earnings rebound to begin. But he does say he thinks that, given the poor stock returns of the past decade, we’ll move toward “more normal returns in the stock… Read More

Shilling: Watch Out For S&P 600

Gary Shilling, president of A. Gary Shilling & Co. and Forbes magazine columnist, speaks to Yahoo! Tech Ticker about his outlook for stocks. He says that investors need to approach things “very cautiously” and that earnings on the S&P could come in at $40 per share next year. Assuming you have a multiple of 15 times earnings this puts the S&P at 600 (15 multiple x $40 per share for the S&P = 600) for… Read More

WSJ, Grantham on The Trouble with Earnings

Is the market cheap, as investors like Bruce Berkowitz and David Dreman have said recently? Or is it still overpriced, as others, like Jim Rogers and Bill Gross, have maintained? The answer may depend on which set of corporate earnings you look at. That’s the issue The Wall Street Journal’s Mark Gongloff examines today. Gongloff discusses the difference between operating earnings (which exclude supposed one-time expenses like writedowns to give a better idea of the… Read More

The Stars — and Fallen Stars — of 2008

Kiplinger’s Fred Frailey looks this week at how some of the world’s top money managers got hammered by the recent market crash, as well as at how other noted managers lived up to their reputations and avoided the plunge. According to Frailey, some of 2008’s big-name losers have been Legg Mason’s Bill Miller (down 59% as of Oct. 30); Longleaf Partners’ Mason Hawkins (down 47%); Oakmark Select’s Bill Nygren (down 36%); Selected American’s Chris Davis… Read More