Wednesday, January 14, 2009

Overheard at Barron's Roundtable 2009

For those who haven't seen it, part 1 of Barron's Roundtable 2009 is out on newstands this week and online at Barron's web site.

Since most Barron's readers have probably already bought this week's issue, I see no harm in reviewing the online version of this year's Roundtable.

Although, given the performance of last year's Roundtable picks, I can see why the assembled crew might not want to dwell on 2008! Felix Zulauf seemed to fare best, replicating his strong performance in last year's Roundtable.

For 2009, the gang seems pretty downbeat, acknowledging the problems associated with this bear market and the recent period of delevaraging.

In fact, most of the participants (Bill Gross, Oscar Schafer, Mario Gabelli, Felix Zulauf, et al) spoke of things like rising unemployment, lower corporate profits, and the perceived need for government stimulus programs. Not exactly the stuff that economic dreams are made of.

Still, I think most were hesitant to come off as bearish as Fred Hickey and Marc Faber, who seemed very sympatico in their view of the US stock market (both see potential for further gains on this rally, with reality setting in soon afterwards), the economy, and the risk of high future inflation.

We'll see who's right in the end, but personally I wouldn't bet against Hickey or Faber too strongly, especially as they are usually (together with Zulauf) alone in seeing things as they are, rather than as they'd like them to be.

Stay tuned for our follow up post on the 2009 Barron's Roundtable, which will be added here after the final installment is available on Barron's website. Look for that in the next couple of weeks.

Related articles and posts:

1. 2008 Barron's Roundtable Review - Finance Trends Matter.

2. Felix Zulauf - Barron's Interview - Finance Trends Matter.

3. Marc Faber on Investments, Economy - Finance Trends Matter.

5 comments:

Kel Murdock said...

What has been a constant since this crisis began is that the mainstream commentators have consistently been well behind the curve in predicting how bad it will get. We are still seeing that phenomena occurring. I have expected more out of this rally followed by further declines as "reality sets in - again" but the market has shown very little strength or conviction. The realists have gotten it correct so far.

David said...

Kel,

Absolutely. Most mainstream commentators have not only been "well behind the curve" in understanding these events, but also in rabid denial of economic logic and the history of similar (previous) events.

You may well be right about the rally; there has been something of a breakdown recently. We'll see if we get even as much upside as Faber and Hickey have allowed for.

Thanks for your comment.

cornsilk said...

It seems sensible to me to watch Obama's growing trend to pattern his economic policies on FDR's questionable example.

History shows FDR's first hundred days to be extremely volatile. He was inaugurated on March 4. He immediately called for a bank holiday from March 6-10.

Then he devalued the dollar 75% by changing the price of gold from $20 to $35.

All this in a matter of days. David, are you worrying?

David said...

Silk,

Certainly there are some parallels to be found here between FDR & Obama, as well as the current period and the start of the 1930s.

I've seen some great commentary on these issues in the past, and some of them are linked here in our post, "Obama's new New Deal".

I'm interested to know what you think of all this.

Anonymous said...

Look again. Faber did quite well. A lot of his recommendations were shorts, so the sharp downfall in indices like the Baltic Dry Index were spot on.