Cheap, large cap stocks. Whether it's conversations off-air or on, that seems to be the mantra of many hedge fund managers as they plan changes to their portfolios for 2011.
It’s not exactly a secret that many of the biggest-capitalized U.S. companies have multiples in the high single or low double-digits.
But that fact, coupled with an overriding sense on the part of many portfolio managers that such companies have limited downside, will benefit from a pickup in U.S. exports and could see growth rates exceed those expected, has those managers plowing in.
While it is hard to deny the premise underlying this bullish view, having a keen sense for the obvious has not always been the way to make money in the stock market.
And so it will be interesting to see whether the mega-cap rally can be sustained or whether this new found respect for cheap large cap stocks will prove the disappointment of 2011.
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