SEATTLE ( TheStreet) -- Bill Smead, manager of the Smead Value Fund (SMVLX), expects U.S. stocks to rise next year, but he's wary about commodities and emerging markets.
The large-cap value fund has risen 32% this year, better than 85% of its
peers. The fund's top holdings include
(EBAY - Get Report)
(BEN - Get Report)
(SBUX - Get Report)
Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks in five fast and furious questions.
Are you a bull or bear?
We are bulls. The point of maximum pessimism was in early March and was probably a 30-year extreme in pessimism. It will take years to work off the negative sentiment toward stocks. Also, it has been eight years since large-cap, recession-resistant quality stocks were in favor on either a relative or absolute basis. As U.S. households increase their saving and commit some of the massive amounts of cash in low-interest liquid accounts to the stock market, brand-name companies could get a large part of the affection.
What is your top stock pick?
eBay is our top stock pick and the No. 1 position in the Smead Value Fund. We are "bottom up" stock pickers and this one has something for everybody.
First, eBay is a sum-of-the-parts story. They own PayPal, Bill Me Later, StubHub, 28% of Craigslist, 30% of Skype, five of the six largest online classified advertising firms in the world and the greatest online auction business in the world. They're also sitting on $5 billion-plus in cash, with no debt.