Barton Biggs runs a multi-billion dollar hedge fund based in New York City, and prior to that he held the title of “chief global strategist” for Morgan Stanley and was with the firm for 30 years. Earlier this month (July 2nd to be exact), Mr. Biggs sold half his equity / stock holdings. However, he recently changed his mind and is buying stock again and dramatically increasing his allocation. He stated the following in a Bloomberg interview earlier this week, “I’ve definitely changed my mind to the degree of risk out there. Economic data around the world in the last 10 days to two weeks has turned more positive. It has exceeded forecasts almost without exception. The odds of the world slumping into a significant slowdown has diminished…The environment is fairly decent right now and there are opportunities.”
Hussman is not optimistic
John Hussman has been a successful fund manager and is familiar with hedging his bets. He recently stated in a July 27, 2010 InvestmentNews.com article that he sees investors become more risk oriented, even though economic fundamentals are deteriorating.
Doll takes a tempered position
Mr. Doll is the Chief Equity Strategist at BlackRock, which is one of the world’s largest asset managers. He believes that economic uncertainty is easing. However, this recovery will be a long, tedious grind characterized by continued volatility.
Three highly successful and experienced advisors with different opinions on the stock market; it will be interesting to see who is right when the year ends.
From trains to taxes
Norfolk Southern Corp. reported a surge in earnings from increased shipments and prices. In addition, a company representative announced that it’s brought back nearly all the employees furloughed during the recession and actually is hiring some employees in areas where business is best. Earlier this month CSX Corp. (eastern railroad) reported positive improved earnings and increased shipments.
Just recently there has been a difference of opinion in two top U.S. policy officials – Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner. Mr. Bernanke believes not raising income taxes is one way to continue stimulating the economy. However, Mr. Geithner thinks otherwise. One positive note I see is some talk of reconsidering any tax increases, until the economy is a much better position. Previously, I thought this was not an option. However, there may be some open minds in Congress to extend the current rates at least for another year.
I find it encouraging to hear about increased shipments for railroads, because shipping equals business activity. In addition, I believe any actions taken that can increase consumer confidence, such as extending the current tax rates, may increase spending and ultimately new jobs, which is the most crucial component for an economic turnaround. More jobs (i.e., more new hires) will result in more tax revenue to the government at all levels (federal, state and local) and ultimately more home buying, which is what is needed to eventually soak up all the excess houses currently on the market. Any positive employment news is welcome.
Quotes
“If you think about what you ought to do for other people, your character will take care of itself.”
Woodrow Wilson, U.S. President
“Make the best use of what is in your power, and take the rest as it happens.”
Epictetus, Greek philosopher
“We should manager our fortunes as we do our health – enjoy it when good, be patient when it is bad, and never apply violent remedies except in an extreme necessity.”
Francois de La Rochefoucauld, writer
Tony Moeller, President
Integrity Investment Advisors
12721 Metcalf, #202
Overland Park, KS 66213
tmoeller@iia-kc.com
913-897-2074
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