Gurus' Recommended Asset Mix Doesn't Match Their Bullish Leanings
SAN FRANCISCO -- Here's a surprise: The bullish gurus were encouraged by
The market's ability to overcome negative news from a host of bellwether (mainly tech) names last week was "one small stride by the Nasdaq, one giant leap for investor-kind," according to Thomas Galvin, U.S. portfolio strategist at Credit Suisse First Boston. "Selling pressure has finally become discriminating."
Notably, shares of Intel (INTC) were recently holding steady in after-hours trading despite the chip giant's declining gross margins, admittedly clouded visibility and forecast that first-quarter sales would fall 15%.Galvin supported his latest bout of optimism -- in which he
Prior to 2000, there were only four years when U.S. Treasury bonds posted total returns over 20% since 1960 -- 1982, 1985, 1986 and 1995. In the years following, the S&P posted average gains of 17%, which dovetails with Galvin's prediction for the index to hit 1600 by year-end 2001.
Mortgage rates falling below 7% means that 50% of the $6.9 trillion pool of mortgages could be refinanced, CSFB predicts. This would "reliquify consumers" and thereby provide "a cushion to the economy."
Stock gains following recent periods of outflows from equity mutual funds -- mid-1994, early 1997 and late 1998 -- suggest "that the time to buy the S&P 500 has been when investor confidence is poor and fund flows are down on a year-over-year basis." Equity funds suffered declining fund flow vs. year-ago levels in December and January, according to
AMG Data and
Liquidity Trim Tabs.
Edward Kerschner, who
GuruVision Special: Awards CeremonyTune in tomorrow when, market conditions permitting, I'll present the hotly anticipated "Guru of the Year 2000" award, among others. Black tie is not required, and bribes are not accepted, but I am willing to entertain offers (just for fun). What would help is if you, dear readers, place your own votes. (Please forgive the somewhat confusing/limited ballot. But if it's good enough for... ah, nevermind.)
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