Investment manager Ken Fisher wants to buy stocks when people are miserable -- and he thinks that is where we are right now.
Fisher says investors are dazzled by the combination of threatened higher interest rates and the headlines on the credit crunch when they should be focused on the "real" growth story, which remains positive.
Fisher cites the performance of the Dow Transports index, which made a new high in recent days. The Transports have long been used as a leading indicator for the market's performance and Fisher argues that if the railroad, trucking and shipping stocks are strong then underlying economic activity must be holding up.
He sees the $46 billion bid for Anheuser-Busch as evidence that money is still available for large corporate deals putting paid to the view that credit remains tight for corporate borrowers.
Fisher says people have had "the pants scared off them" but when this correction is played out the markets will be back to making gains. His message then is to buy across the markets -- and especially in sectors like mining and infrastructure where demand is clearly still strong.
Whether you think Fisher "gets it" or not, check out the video clips of Fisher. We had a lot of fun challenging his view and think the exchanges make compulsive viewing.
And a big thank you as always to all of you who took the time to write in. We have reproduced many of your comments and questions and would be happy to take more feedback on the show, or the discussion with Ken Fisher.
Buy, But Buy Smart
Look, the statements that Ken is throwing out there are statements that people simply don't want to hear, because many of those people are running scared and have just sold a bunch of stocks.
What have the really smart investors done lately, like Warren Buffet? Last I heard they were buying well known, good companies, at an apparent discount. It's a great time to buy selectively and with a long term horizon.
In contrast to what Ken is saying, I don't believe taking a wild shotgun approach; that seems quite dangerous especially when there is another Bear Sterns lurking out there.
Cook Don't Live in History
Your guest, Mr. Fisher, seems to think that because there is no example in history that there is no possibility of a new paradigm forming.
That is the problem with people living in history: they can't see what's coming.
Way off the Mark
I live in California, and with high gas prices and sinking home values consumers are and will continue to pull back spending. They have no choice. We are leveraged to the hilt.
The recent retail sales data that show strong sales was a due to stimulus checks being issued (only the discount stores had strong sales, i.e. Wal-Mart, Target, etc.). And his comment about the airlines is completely incorrect. Airlines in the US are laying off people left and right and shuttering planes. That's why capacity is still strong.
Finally, a rational guest on CNBC and not just one more hand-wringing talking head like your all-too-typical guests.
No Bear Consensus
All (Fisher's) reasons for bullishness are backward looking data. Higher energy prices and food prices are not yet priced into most economies. Most nations are raising interest rates which, combined with higher input costs will reduce earnings.
I have yet to hear consensus bearishness among the "talking heads." Everyone wants to buy, believing a test of the Jan/Mar lows will hold.
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