Investing Newsletters Turning Bullish

But expressing market optimism can lead to bad analogies.

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Investment newsletter writers are getting more bullish about the market. Optimism has actually been on the rise for six consecutive weeks, to be exact. To see for myself, I took a look at two newsletters that landed in my mailbox this week:

• Eric Kobren, executive editor of the Fidelity Insight newsletter, points out that there are still "ample" reasons for concern: The housing market is in a funk, consumer confidence is low, food and gas prices are squeezing everyone, and credit is tougher to get. But stock investors are finding reasons for optimism, he says:

While stock prices are no bargain at today's weak earnings levels, it should be easier for companies to beat those earnings going forward. Balance sheets are being cleaned up (especially among financials) and the weak dollar is helping exporters.

Kobren currently favors Fidelity Mega Cap Stock, Fidelity Dividend Growth, and Fidelity Blue Chip Growth—funds that focus on large companies and are all chock-full of global corporations—in his model portfolio.

• Here's what the folks at the Oberweis Report, a monthly newsletter focused on fast-growing, small-company stocks, have to say:

Market bottoms are like giving birth. The exact moment is hard to predict, but it is always painful. Though it sometimes takes longer than you'd guess, you know it is coming. And once it is over, it sure feels better. March 2008 will likely prove to be that bottom.

Eww. There's got to be a better analogy.

The Oberweis crew goes on to say that while they expect many companies to experience slowness as the year goes on, "don't make the mistake of assuming that all investment opportunities are unfavorable. In many cases, shares already reflect expectations for a sharp slowdown.... Even for issues near their highs, we suspect prices would be much higher under more normal market conditions. Watch this quarter's earnings reports for companies reporting solid growth; now is the time to buy them at discount prices."

Sounds pretty optimistic to me.