Hopeful for a '1938-type Recovery': Biggs

The markets could see a 1938-type recovery this year, said Barton Biggs, managing partner at Traxis Partners which has more than $1 billion under management.

"One of the reasons I'm bullish here is that I'm convinced that the hedge fund industry is in a very, very low risk, conservative position," said Biggs. "We're running a very substantial net-long."

Although the rally is not the start of a bull market, he cautioned, it is "significant."

"We could be in a little pause here while the markets correct," he said. "But basically, we're half way through or a third of the way through a really significant rally."

Although the global PMI is still below 50, indicating the world economy continues to contract, he said, the rate of change has diminished substantially.

"When you look at the components of the PMI, it's very encouraging that new orders have picked up, that delivery times have continued to increase and the inventory component of the PMI continues to decline," he said.

However, investors know it will be a rough earnings season, Biggs said.

"There's gonna be all kinds of disasters," he said. "And the expectations on the S&P's earnings range from 40-55 and maybe they're even gonna be lower than that. Guidance will have some influence on the market."

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