Investor Agenda

Bob Doll: “We Continue to See Gains”

Bob Doll, Vice Chairman at Blackrock, is as respected an investor as you’ll find anywhere. It’s no wonder he’s the Global Chief Investment Officer at the world’s largest investment management firm. As such, his insights carry a lot of weight.

We are fortunate to have him as one of our elite investing pros in Wall Street. While Bob does not have the proverbial crystal ball, if you look back over the previous years, he still does well predicting what will happen.

Every January, Bob issues his predictions for the coming year, much like another noted analyst we’ve talked about before, Byron Wien. Just for fun, I went back and looked at Bob’s predictions for 2009, and I was impressed, especially considering the bleak and uncertain environment at the time.

I won’t go through all of his predictions with you (you can read the complete list here if you’re interested), but let’s talk about a couple of the most important. First, Bob predicted that U.S. stocks would record a double-digit percentage gain in 2009.

“With record fiscal and monetary stimulus, substantially lower oil prices, much cheaper valuations, significant negative sentiment and lots of cash on the sidelines,” Bob wrote, “it is likely that stocks will begin to look ‘over the valley’ sometime in 2009 and experience a noticeable rally. Like many of our predictions, this one is dependent on reflationary forces eventually winning out over deflationary ones. If we are correct in our assumption that an earnings rebound is likely in 2010 which becomes evident in 2009, a year-end S&P 500 target of 1000–1050 seems possible.”

It was a gutsy and accurate call. The S&P 500 is slightly above his predicted range with one month left to go in the year.

Here’s another: Oil and other commodities bottom and move higher by year-end as emerging market economies begin to recover.

Bob wrote: “As visibility increases that the global economy will eventually stabilize, we expect commodity prices to find a bottom and begin to move higher. Oil holds a particular fascination for us, having peaked at nearly $150 per barrel at mid-year only to fall to below $40 toward year end. Our guess is that equilibrium prices are somewhere in the $60-80 price range.”

Also a good call. Oil has traded in that range most of 2009.

We’ll take a look at Bob’s predictions for 2010 when he releases them again in January. In the meantime, readers of my Wall Street newsletter will get a preview in the upcoming December issue. In talking with Bob, I can tell you that he still sees opportunity. “2010 should be a period that sees choppier markets than the last six months,” he told me. “Not straight up, but over time, we continue to see gains.”



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