Economic Forecasters, the Bulls: Fisher, Altfest, Mobius & More—a Slide Show

THE BULLS

It's the Bears vs. the Bulls, but this playing field is economic prognostication.  AdvisorOne presents a slide show of some of the noted economic optimists and pessimists. Last week we let the Bears run wild, this week the Bulls get their turn.

 

Ken FisherKEN FISHER
CEO, Fisher Investments Inc.

 

The billionaire investor 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 in January 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.”

The Standard & Poor’s 500 Index has risen 93% from its March 2009 low 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.

“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.”

Stampede! Well, sort of.

It's the Bears vs. the Bulls, but this playing field is economic prognostication.  AdvisorOne presents a slide show of some of the noted economic pessimists and optimists. Last week we let the Bears run wild, this week the Bulls get their turn.

 

JP Morgan buildingDAVID KELLY
Chief Market Strategist of J.P. Morgan Funds

 

Kelly hosted a call on March 2 to address rising oil prices and political turmoil in the Middle East.

"Oil makes everyone very nervous," Kelly  began. Four of the major recessions since the 1970s have been preceded by spikes in oil prices, he said.

Oil is not inflationary in the United States, Kelly said, though it is in developing markets. In the United States, however, oil is deflationary because proceeds flow out of the country instead of to American producers.

David KellyThere have been encouraging signs in the job market, Kelly (right) told callers. "If not for oil, you'd say the economy was moving up again," Kelly said.

The bottom line, he said, is to be overweight equities and underweight fixed income; and, of course, keep watching the price of oil.

Just to help prevent oil from derailing the economy, I'm buying a Nissan Leaf.

It's the Bears vs. the Bulls, but this playing field is economic prognostication.  AdvisorOne presents a slide show of some of the noted economic pessimists and optimists. Last week we let the Bears run wild, this week the Bulls get their turn.

 

LEWIS J. ALTFEST, Ph.D.
CEO, CIO and a Principal Advisor for Altfest Personal Wealth Management

 

In a story in March's Investment Advisor magazine, Altfest said:

"Emerging markets are on every investor’s lips, and why not? Their 10-year cumulative record through 2010 is up 350%, about twice that of any other sector. It compares with a puny 15% for the S&P 500. Many emerging market countries learned their lesson in the late-1990s 'Asian Tiger' boomlet and crash, and placed their balance sheets in much better order than the United States and Europe with obvious benefits for their economies and markets.

"A key reason for this performance, and perhaps the most influential factor for many emerging markets in the future, is China.

"We believe all advisors should establish a core holding in developing markets. As value-oriented investors, we instituted our positions in late 2008 near the bottom," Altfest (right) said. "As markets have risen, we have in some instances trimmed a little and kept the rest.

"For advisors, participation in emerging markets involves keeping holdings that are less well-known, subject to governmental influence and that often have a lower quality of earnings. It is still worth it given their growth potential."

I guess 1.3 billion Chinese, and the world's 2nd largest economy, can't be wrong.

It's the Bears vs. the Bulls, but this playing field is economic prognostication.  AdvisorOne presents a slide show of some of the noted economic pessimists and optimists. Last week we let the Bears run wild, this week the Bulls get their turn.

 

Mark MobiusMARK MOBIUS
Executive Chairman of Templeton Asset Management

 

Frontier markets are a group of outlying countries that may still be off the radar screen for even veteran emerging markets investors, but International investment gurus like Mobius believe that these markets are the only places to be for investors with long-term investment horizons.

“In the future, we expect these markets—at least some of them, to become quite important and to eventually become full-fledged emerging markets,” Mobius said in February's cover story for Investment Advisor magazine.

Frontier markets include countries like Mongolia, Kazakhstan, Cambodia, Bangladesh, Nigeria, Ghana, Georgia and Estonia—nations that in many cases, would not even be thought of as tourist destinations, let alone investment targets.

For Mobius and many others, one word sums up the frontier market story: Commodities. Many frontier market countries are well positioned to benefit from the strong demand for these resources from high-growth countries like China and India.

“The economic drivers across frontier markets are diverse and [they] ensure a diversified portfolio,” Mobius says.

Since "Mr. Clean," as he is known, sees Mongolia as the future, I'm buying a condo in beautiful downtown Ulan Bator.

It's the Bears vs. the Bulls, but this playing field is economic prognostication.  AdvisorOne presents a slide show of some of the noted economic pessimists and optimists. Last week we let the Bears run wild, this week the Bulls get their turn.

 

WILLIAM J. BERNSTEIN
Editor of the quarterly journal Efficient Frontier
Principal in Efficient Frontier Advisors.

 

Bernstein is the author of several books, including “The Birth of Plenty.” Bob Seawright, who blogs for AdvisorOne, asked Bernstein recently about his book “The Birth of Plenty,” where Bernstein outlines the four primary elements as the building blocks of human progress – property rights, scientific rationalism, capital markets and transportation/communication. Seawright asked “Are any of these at risk in America today and, if so, how?” Bernstein responded:

"It’s quite obvious that as a nation we’ve become fat, dumb and lazy: a very high percentage of our science graduates, for example, are foreign born, and an additional large slice is first generation Americans. We overconsume and undersave, particularly on educational, social and transport/communications infrastructure."

"The good news is that none of those things ... reflect on the crucial four factors: our institutional infrastructure, which is the world’s best, bar none. It’s not just that we have open and free capital markets, universities, and an independent judiciary that protects individual liberties and property rights, it’s also that we do a superb job of intellectually and financially nurturing our best and brightest.

"So I’m still optimistic; even if we’re getting lazier by the generation, we’ll still attract the global cream of the crop here."

Take that, Mongolia! U-S-A! U-S-A!

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