Harrison explained that last year’s market rally wasn’t driven by economic news, but by investors' revaluation of risk.
“We don’t think that’s in play anymore, so there will be more impact from things that happen in the news to what we’re doing,” he said.
“So 2010 is not going to look like 2009—embrace change, because change is coming.”
In the meantime, Smead believes the “wall of worry” is being reenacted in the market.
“You need that wall of worry—you can’t solve all the problem at once,” he said. “If you want a long-time multi-year bull market, you take many years to solve them.”
Smead said there are abundant investment opportunities in larger companies, which will be the leaders in this market.
“The companies that have access to capital, have massive balance sheets, are going to be able to grow at the expense of the smaller players, who are not going to be able to grow,” he said. “It’s a big advantage to the high quality trade and we like that.”
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Smead owns shares of MRK, PFE and AMGN via owning shares of the Smead Value Fund.
No immediate information was available for Harrison or his firm.