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It's Time to 'Buy Domestic': Chief Investor

Stocks advanced after a handful of upbeat economic reports Thursday. John Buckingham, chief portfolio manager at Al Frank Asset Management, and Bill Smead, CEO and CIO of Smead Capital Management, shared their best plays.

“We are in the seasonally favorable time of the year and the economic data over the last week has generally been very good, relative to expectations,” Buckingham told CNBC.

“So we’ll close the year higher than where we are today and I am optimistic about 2011.” (Scroll down for his full list of stock picks.)

In the meantime, Smead said markets are entering the period where they will start to "bifurcate."

“The emerging-market enthusiasm has reached a completely silly stage and at that stage, China’s problems should become more and more obvious over the next six months,” said Smead.

“So the cyclical commodity-oriented [markets] like Australia and Canada that have dug themselves up and shipped themselves to China will go out of favor. And what will come into favor is the rumblings from the low end of the U.S. economy.”

So investors ought to 'buy domestic,' suggested Smead.

“The consumer discretionary stocks are outstanding and that’s an internal thing and a lead indicator,” he said.

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Smead Likes:

Merck

Abbott Labs

Mylan

Wells Fargo

Bank of NY Mellon

Buckingham Likes:

Abbott Labs

Home Depot

MDC Holdings

Hudson City Bank

Lockheed Martin

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Scorecard—What They Said:

  • Buckingham's Previous Appearance on CNBC (Jul. 24, 2010)
  • Smead's Previous Appearance on CNBC (Nov. 3, 2010)

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More Market Analysis:

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CNBC Slideshows:

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CNBC Data Pages:

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Disclosures:

No immediate information was available for Buckingham or Smead.

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Disclaimer

Symbol
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ABT
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BK
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HCBK
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HD
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LMT
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MDC
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MRK
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MYL
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WFC
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