More brave souls are willing to call an end to this bear market, a notoriously tough moment to catch given the fear and uncertainty that marks the switch from downturn to rally. But with the Dow up more than 25 percent since those March 9 lows, more people are starting to see a bull market in the works. Here's a rundown of the recent optimism:
Anthony Bolton, president of investments at Fidelity International, via Bloomberg:
Low valuations indicate advances that began in March are the start of a bull market, Bolton said. He favors financials, consumer cyclical, technology, and “value stocks,” such as retailers, automakers and construction-related shares.
“All the things are in place for the bear market to have ended,” Bolton said in an interview with Bloomberg Television in Hong Kong. “When there’s a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I’d like to bet against that.”
And his contrarian take:
“Nearly all the broker research I read says ‘bear-market rally,’ that’s one of the other things that makes me think it’s the beginning of a bull market, not a bear-market rally,” Bolton said. “When everyone is extremely negative, I want to bet against that. If you wait for things to get better, you’ll miss the rally.”
CBS head Sumner Redstone sounds bullish too, who told the Milken Institute conference, "I think we're in the beginning of a bull market. When a bull market begins, nine months later the economy turns around." (via Reuters). More:
"It was always tough, but today we are in the throes of something we have never seen in our history. It's clear in recent times the market is looking for a bottom."
"The news was extremely bad on the GDP and the market went up. In a bull market, the market ignores bad news. Today, we ignored extremely bad news," Redstone said in a Q&A session with CNN's Larry King.
Lastly, analysts at Birinyi Associates see more reason to believe in the bull despite a still-troubled global economy and broad uncertainty. It's a gut feeling sort of thing, but with huge amount cash on the sidelines and negative sentiment among analysts and investors, they're willing to bet on a rally.
As the old cliché or saw goes, “if it walks like a duck and talks like a duck….” The stock market, in April, gave further evidence that it is a bull market. We have not seen or read anyone who strongly suggests that is the case, but April took us over the brink into a new bull market.
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Muser of NM 11:14AM April 30, 2009