This Correction Is 'Normal'—Strategists Still Bullish
Fears of global economic contagion sent the markets falling for the second day in a row, pushing the Dow below 10,000. But Bill Smead, chief executive and chief investment officer of Smead Capital Management, and Craig Hodges, co-portfolio manager at The Hodges Fund, said they still remain bullish on the markets.
“While everyone’s worried about what’s going on in Greece and Spain, things are improving significantly for U.S. consumers,” Smead told CNBC.
“American corporations are the most flush with cash they’ve been for 25 to 30 years and profit margins are excellent.”
Smead said is bullish about the markets.(See his stock picks, below.)
Hodges agreed and added that this market correction is “normal.”
“Anytime you go up 70 percent, you’re going to have these kinds of selloffs,” he said.
“There’s been little U.S. investment that’s gone on in the last 18 months and so U.S. looks pretty good compared to the rest of the world.”
“If you drill down, stocks are cheap,” Hodges continued. “Most stocks in our portfolio are in the 10 to 12 type P/E ratios and I don’t think that’s expensive.”
Scorecard — What They Said:
- Hodges' Previous Appearance on CNBC (Nov. 12, 2009)
- Smead's Previous Appearance on CNBC (Apr. 6, 2010)
Counterpoint — What the Bears Are Saying:
CNBC Data Pages:
No immediate information was available for Hodges or Smead.