Dec. 9, 2002 — To secure re-election, President Bush will move aggressively to jump-start the economy next year, said Mario Gabelli, noted value investor, speaking at an Enterprise Group of Funds press briefing last week in New York.
The administration’s economic steps will include targeted spending and a wide array of tax cuts, including ending double taxation on dividends, said Gabelli, who manages Enterprise Grp Small Company Value Fund/A (ENSPX) and Enterprise Grp Mergers & Acquisitions Fund/A (EMAAX).
Bush’s strong economic moves in his third year of term follow a long-standing tradition, said Ron Canakaris, manager of Enterprise Grp Growth Fund/A (ENGRX) and president of Montag & Caldwell. A president’s third year in office is often “extremely favorable” for stocks, said Canakaris, who noted that the market has risen an average of 18% in the third year of past administrations.
Several fund managers speaking at the Enterprise Funds briefing were moderately hopeful about the economy next year, forecasting GDP growth of 1.5% to 2.5%.
Dan Chung, manager of Enterprise Grp Technology Fund/A (EIFAX) and chief investment officer of Fred Alger Management, predicts the economy will grow 2.5% next year. A moderate gain is likely because shallow recoveries usually follow shallow recessions, Chung said. He is “quite bullish” about stocks, although he expects the market will retest its bottom of October 9. Technology stocks likely to gain in this environment include Yahoo Inc (YHOO), Amazon.com (AMZN), eBay Inc. (EBAY), Dell Computer Corp. (DELL), Microsoft Corp. (MSFT), and Flextronics Intl (FLEX), Chung said.