Stocks were cheap despite slow earnings growth and could see strong gains in 2013, Delphi Management President Scott Black said Tuesday on CNBC.
"Overall, we're fairly constructive. The only thing I think that could really derail this would be a major brouhaha again in the Congress with the president and the debt ceiling," he said.
Black also said he could see earnings growth in the 5 to 6 percent range.
On "Fast Money," he revealed one of his under-the-radar picks: Medical Properties Trust.
Among Black's other top picks:
Black also laid out the case for the existence of a bubble in bonds.
"If you look at spreads, they're much too tight to the curve, especially for high-yield," he said. "People are looking at just the nominal interest they're collecting, but they're not thinking about the duration of what happens if ultimately the Fed withdraws liquidity in a few years and rates back up."
Black also factored in the likelihood of another downturn.
"And then the other thing is, if the economy were to go back under recession, many of the high-yield bonds, especially the lower-rated ones, would have a hard time to pay the interest because obviously business would be soft," he said. "So you have to be careful about the risk that you're taking for that nominal yield of 5 or 5 percent."
Trader disclosure: On Jan. 29, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Mike Murphy is long GS; Mike Murphy is long TGT; Mike Murphy is long FB; Mike Murphy is long GOOG; Mike Murphy is long TWI; Mike Murphy is long TOL; Joe Terranova is long VRTS; Joe Terranova is long AAPL; Joe Terranova is long GS; Joe Terranova is long DELL; Joe Terranova is long SWN; Joe Terranova is long XOM; Joe Terranova is long GOOG 750 CALLS; Joe Terranova is long NFLX 160 CALLS; Joe Terranova is long AAPL 455 CALLS; Stephen Weiss is long RIMM; Stephen Weiss is long QCOM; Stephen Weiss is long TBF; Stephen Weiss is long M; Stephen Weiss is long BTU; Stephen Weiss is long CNX; Stephen Weiss is long WLT; Stephen Weiss is long AAPL CALLS; Josh Brown is long AAPL; Josh Brown is long GDX; Josh Brown is long GLD; Josh Brown is long XLU; Josh Brown is long TLT; Josh Brown is long XLF; Josh Brown is long WMT; Josh Brown is long TGT; Josh Brown is long QCOM; Josh Brown is long PFE.
