Billionaire investor Kenneth Fisher says the biggest U.S. companies will lead global stocks in 2011, even as returns diminish after a 21-month bull market.
Fisher, who is known for making bold, often contrarian predictions, told Bloomberg Television on Monday that “America will do better than the rest of the world. People will move away from small cap and emerging markets and more toward boring things that evidence quality.”
Fisher, 60, oversees $41 billion at Fisher Investments Inc., based in Woodside, Calif.
As Bloomberg notes, the Standard & Poor’s 500 Index has risen 88% from its March 2009 low as the Federal Reserve pledged to stimulate the economy and companies reported better-than-estimated earnings. The MSCI Emerging Markets Index advanced 134%, while the Russell 2000 Index of small companies rallied 130% during that period.
Timken Co., a U.S. maker of bearings and alloy steel products, is a company that will do well in a “middle phase” of a bull market, Fisher said. Profits are expected to increase for a fifth quarter when it reports earnings around Feb. 2, data compiled by Bloomberg shows. The stock has risen almost five-fold since March 2009.
Fisher isn’t always right, and Bloomberg recounts his prediction from four years ago.
“I’m on the wildly optimistic side of things,” Fisher told Bloomberg News at the end of March 2007. While the S&P 500 went on to rise 10% in six months to a record high, it then plunged as much as 57% through March 2009.
The investor, who correctly predicted in April 2009 that the S&P 500 would extend a rally that started in the previous month to between 60% and 70%, said he doesn’t expect “high equity returns” in 2011.
“I do not think the bull market is over, but I expect this year to be frustrating for almost everyone,” Fisher said. “This is a year where returns are likely to be disappointing to bulls and bears alike.”