Calamos said 1,200 to 1,250 on the S&P 500 is “very possible” by the end of next year.
“If the economy starts to slow down again we’re going to see an additional stimulus package in place, and we’re going to see the Fed inject more liquidity,” he said.
“They’re not going to let this bubble collapse—they’re going to have to continue to feed this monster.”
In the meantime, Black said he is a bottom-up stock picker and it is important to find companies with low P/Es and low price-to-book ratios.
“There’s still tons of liquidity—there’s still $3.3 trillion in money market assets sitting on the sidelines…so the money keeps pressing into the stock market,” he said.
Black noted that there are certain sectors that offer cheap stocks.
“Some of the retail companies are still selling at 8 to 10 multiples like The Buckles, Aeropostale,” he said.
“Some of the steel companies are going up—Allegheny Technologies, Commercial Metals—these stocks are still cheap price-to booking, earnings are turning and they’re still reasonable values. But as a whole, markets are really well picked over.”
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No immediate information was available for Black or Calamos.