Two Investors with Over 120 Years of Combined Experience are Bullish

Mark Hulbert of MarketWatch tapped two long term market veterans – Sam Eisenstadt, former research director at Value Line and Norman Fosback, former president of the Institute for Econometric Research – for their thoughts and insights on today’s market. The two, who combined have over twelve decades of stock market investing experience, both believe investors should be buying stocks now vs. increasing cash positions.

Eisenstadt uses an “econometric model he has been perfecting for decades.” According to Eisenstadt, his model has “an R-squared of 0.33 for his model’s forecasts since the early 1950s, which means that it has been able to explain 33% of the variation in six-month changes in the S&P 500.” Hulbert points out that few models achieve such a high R-squared statistic.

Fosback uses valuation metrics to assess the market’s attractiveness and the most recent decline in stocks has made the market veteran more bullish. He says that that when markets are trending into overvalued territory, there will always be reasons for price corrections, and if it wasn’t China it would have been something else that would have precipitated the most recent decline.

Hulbert notes that those who have seen past bear markets and are long time market participants like Eisenstadt  and Fosback are less likely to panic when compared to. investors who have never seen a bear market (i.e. younger investors). This long-term perspective is something younger investors should keep in mind when investing in stocks.