In his latest Forbes column, Kenneth Fisher says that bargains abound in the market — and that, with a “wall of money” coming from the global stimulus efforts, now is a time to be bullish. And, in an interview with Bloomberg, he says the bull run could be a big one.
“Why aren’t people buying stocks when stocks are cheap?” Fisher asked in his Forbes article. “Investors refuse to think a few years out to the resurgence of the economy because they’re busy staring at their feet. Look up and out. This huge bear market has presented huge opportunities. Beyond simple cheapness, we’re on the cusp of the biggest global monetary and fiscal stimulus relative to the world’s GDP in history. There is a wall of money coming. And then a boom!”
Fisher writes that, while there are problems, there are good signs: The global yield curve is steep and the core of banking is again profitable; inventories are lean; and President Obama is going to learn to govern to the center. “Don’t think of where stocks will be next week, month or quarter,” he says. “Think about where they will be in three years.” Some of his current picks: Magna International (MGA), Marathon Oil (MRO), Stora Enso (SEOAY), Siemens (SI), Tata Motors (TTM), Net Communications Services (NETC), and Braskem (BAK).
In his Bloomberg interview, Fisher says a surge in stocks could come quicker than the three-year timeframe he mentions in Forbes. Stocks could be as much as 70% higher than their March 2009 lows by March 2010, he predicts. He’s bullish on emerging market stocks and shares of energy producers, metal and raw-material producers, consumer companies reliant on discretionary spending and technology makers. Investors should underweight “defensive” industries like household product manufacturers, and health-care and telephone companies, he says.
Fisher also says investors should have about 40% of their assets in U.S. equities, 20% in emerging markets, including China, India and South America, and, in particular, Brazil. The rest, he says, should go to developed markets, with a “heavy orientation” toward Europe, Bloomberg states.