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BlackRock's Doll: Bearishness Is Good

Negativity about the stock market is rampant, and to BlackRock Vice Chairman Bob Doll, that is a healthy sign.

Doll is BlackRock's chief investment officer for global equities, and he visits plenty of financial advisers. "The mood is very thick," he said. "To the contrarian, it feels good."

Doll has been expecting the S&P 500 to trade in a range between 1250 and 1450. He said it is a time to be more constructive when the market is at the lower end of that range. On Friday, the S&P 500 finished at 1298.20. For the time being, he says, there is money to be made trading around your core positions.

The strengthening dollar should be a good thing for stocks -- but it does not mean it is time to shy away from the big multinationals that reaped huge growth from the weak dollar.

"It'll take quite a dollar run to impact their fundamentals. The dollar was down a ton. It will take quite a rally to take away our competitive advantage. Make sure it's not the only thing in your portfolio. Don't shy away from our dollar advantage," he said.

Doll says he is still underweight financials but he sees some opportunities there.

"In the teeth of the July decline, we were adding to financials, and in the last couple of weeks we trimmed some back," he said. "...We still think it's premature, but on big dips like we had, adding to an underweight position in financials is the right thing to do. If they run up, like they did, you've got to let them go."

I asked Doll how far along he thinks we are in the credit crisis, since we continue to see its nasty effects bite into financial stocks and the stock market in general. "The line is six or seventh inning, past half-way, but there's still some serious stuff to go."

The risks that remain for stocks are further slowing of the U.S. economy or a deeper global recession than anticipated. "As long as real estate is a problem, the financial system and consumers will be deleveraging," he said.

The decline in oil prices has been a plus for stocks and the economy, and Doll thinks crude has seen its high for the year.

"I think we've set the highs for the year, and I'd be shocked if it went under $100. I think it's going to consolidate at a high level and be volatile around it...It's not going to crater."

Doll has been long energy stocks, and he says their performance has been a bit irritating. Oil shot up, but energy stocks did not keep pace, and they got beaten down as it declined. "I guess the stubbornness in me would say..Why don't I get the upside and I have to pay the penalty on the downside," he said. He says he was adding to that position last week.

As for the presidential elections, Doll said the market should find some traction once the election is over. He said there should be a period of improved sentiment. "That may be helpful. The problem is, it may not last," he said.

In terms of the presidential candidate, it doesn't really matter who wins from a market point of view: "I think the market is saying the Democrats are going to increase their lead in the House and the Senate, and it doesn't much matter who wins the presidency," he said.

One other worry: the geopolitical situation. Like many in the markets, he is warily watching the events in Russia and Georgia.

Our Readers are Bearish

By the way, I shared our Market Insider poll from earlier this week with Doll. He said it was encouraging that more than half of the 500-odd readers who took the survey were bearish. That's the contrarian view.

We noted that Wall Street strategists expect the S&P 500 to be 16 percent higher by year end. (Doll was not included in that group.)

Only 11 percent of our readers think the S&P will be up 15 percent or more by year end. Another 11 percent see it 10 to 15 percent higher, and 26 percent expect it to be flat to 10 percent higher.

But 59 percent see stocks lower by the end of the year. Of those 23 percent expect it to be flat to 10 percent lower, and 29 percent are very bearish and expect a decline of 10 percent or more.

Take the poll yourself.

Questions? Comments? marketinsider@cnbc.com