Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Looks like we are going to see the market’s first significant gap down of the year this morning – no specific reason, it is just “due”. There have been any number of bears who have been turned to the bull camp in the past 2-3 weeks, but one guy consistently bullish has been well known pundit Laszlo Birinyi, who came out with a S&P 1700 call yesterday on CNBC. It would be easy to say “hey that was an obvious ‘call the top’ moment” but there have been any number of similar signals (Roubini bullish, uber bullish Barron cover, etc) over the last month which have led to only more pain for bears. Either way it’s always good to see the ‘other side’ of the argument so below is the video:
- Well-known stock commentator Laszlo Birinyi sees more than a rising stock market. The market bull told CNBC Monday he sees signs of a U.S. economy that may be doing far better than others expect. “This year the bet is GDP of 2 percent to 2.5 percent,” he said. “When I look at the market I see stocks like Cummins and Salesforce.com, Microsoft, General Motors up 20, 30 and 40 percent. That makes me question, maybe the market’s saying something about a good economy. “I just wonder if we’re prepared for a 3 percent to 4 percent GDP? If it does [reach that level] I think we can again have a mirror of 1995 where the market surprised everybody on the upside.”
- The head of Birinyi Associates, who has long stressed picking strong individual stocks that can resist market volatility, last week released a robust forecast for a Standard & Poor’s 500 spiking to 1,700 this year, up over 20 percent. He based the forecast on market patterns showing this year’s rally is remarkably similar to what happened in 1995, when expectations were low for both stocks and bonds.
- “What happened was just the opposite. Interest rates went down, the market went up 35 percent” and had the best year in 50 years, Birinyi told CNBC. “As I’ve often said, the negative case is always more articulate, it’s always more rational, more reasonable because we see it,” Birinyi said. “The market is looking ahead, and I contend what stocks are telling us is a possibility, and I think a fairly good possibility, that something positive is going to develop [and] perhaps we’re underestimating the economy. Don’t disregard the possibility of something good happening.”
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