Sunday, January 16, 2011

Barron's roundtable highlights

Barron's published the first installment of its famous Barron's roundtable, featuring 10 "gurus" talking about the economy.

The experts are:

  • Archie MacAllaster, MacAllaster Pittfield Mackay
  • Fred Hickey, The High Tech Strategist newsletter
  • Meryl Witmer, Eagle Capital Partners
  • Mario Gabelli, Gamco
  • Bill Gross, PIMCO
  • Abby Joseph Cohen, Goldman Sachs
  • Oscar Schafer, OSS Capital Management
  • Marc Faber
  • Felix Zulauf, Zulauf Asset Management
  • Scott Black, Delphi Management

The discussion is summarized below, but if there's one theme it's: We're fine at the moment, and we're screwed long term.

As for this year:

  • Witmer: The economy is coming back nicely, but stocks are pretty fully valued at this point.
  • Black: Things are fine now, but we're in trouble long term because we're kicking the can down the road.
  • Schafer: Yes there are long term issues, but it's a stock picker's market, and stocks will rise 5-10%
  • Zulauf: The developed world, in contrast to the emerging world, is living in a fantasy.
  • Gabelli: Everything will be fine this year. China slows a little. Europe keeps bailing out the PIIGS, and Obama moves to the center and all his hunky dory.
  • Gross: Yes, the economy will grow 4% this year, but it's a sugar high, and without serious re-investment, the US is going nowhere.

As for the deep, structural issues that everyone is worried about, what are they?

  • Cohen: We have a deep educational deficit. We need more investments in science.
  • MacAllster: But the US still leads the world in tech innovation.
  • Hickey: But US companies are all forced to hire overseas workers, for lack of talent in the US.
  • Faber: Everyone's living in a dream world. It's all the Fed's fault!

On gold:

  • Hickey: 50% of my assets have been in gold for 7 years. It's ridiculously under-owned still.
  • Zulauf: It still has a long way to go.

On overall market predictions:

  • Hickey: If the Fed keeps printing, the stock market could go another 10% higher. Otherwise, , it will collapse.
  • Gross: With GDP of 4%, stocks could move 5-10% higher.
  • Cohen: S&P 1500!
  • MacAllaster: Here comes another 1,000 point dow rally.
  • Gabelli: 5-10% gains.
  • Zulauf: 10% range one direction or another.


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