Over the weekend, the Wall Street Journal profiled the investment outlook of Barton Biggs, formerly Morgan Stanley's global chief investment strategist. According to Biggs (also the author of Hedge Hogging), the worst is now over for the global financial markets:
"Conventional wisdom is that the market will test its lows, and go lower again. A really serious bear like George Soros thinks we've seen just the first part of the bear market. I'm nervous, but my intuition tells me that after this consolidation is over, the next move will be up, not down.
Psychology is involved here. I like the fact that the market is worried. I like that The Wall Street Journal runs articles about that. That's all good. But the puke point has been reached, in March. Because of the problems we're living under, the market should be in a trading range for the rest of the year, between 1250 and 1550 in the S&P 500.
Right now we've had a classic bear-market rally. The market has recovered 50% of the ground it lost since January. A lot of good things are happening in the world. Since 2000, operating earnings for the S&P 500 are up 63% and dividend yields up 86%, while 10-year Treasurys have dropped from 6.2% to 4%."
Given Biggs' inside knowledge of the hedge fund world, do you think that other hedge fund managers feel the same way? Or is Biggs sticking his neck out with a true contrarian view?
[image: Barton Biggs]
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