Economy Is 'Healing Itself'—Buy Financials: Chief Investor
One year ago, President Barack Obama signed the $787 billion stimulus bill. Has the bill helped the US economy and if so, how? Bill Smead, chief executive and chief investment officer of Smead Capital Management, shared his insights.
“Only about a third of the stimulus is in the system,” Smead told CNBC.
“I’m in favor of leaving things alone and letting the rest of the two-thirds run through the system…There’s plenty of anecdotal evidence that people are buying and doing things.”
Smead said the economy is “healing itself” well and the previous deep recession has had a cleansing effect.
“We’ve got a new reality and people are frustrated that we’re not making big ticket purchases, but I think that’s part of the healing process,” he said.
Smead said he’s been buying financials over the last few months, including Wells Fargo.
He added that investors are looking at what the annualized earnings of the banks will be, once the writeoffs period ends.
- Watch Smead's Previous Appearance on CNBC (Jan. 28, 2010)
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Smead's firm owns shares of Wells Fargo.