BOB DOLL: BULLISH ON STOCKS

July 20, 2012

There was a counter culture novel published in the 1960s, titled I’ve Been Down So Long It Looks Like Up To Me, a phrase later memorialized in a song written by Lee Hazelwood and picked up by the rock band The Doors that just might describe where market psychology is today. As last week’s guest, economist David Rosenberg wrote recently, the phrase “consumer confidence is an oxymoron.” As you can see from his chart consumer confidence is “mired in recession territory.” As Rosenberg points out “we are supposedly in the third year of a recovery, but confidence is below the level that would be consistent with economic contraction.” As he noted, he is “noticing a certain degree of despair these days, just as I am getting enthusiastic about the future.”

Then there are investor views of the stock markets. According to next week’s guest, strategist Francois Trahan, one survey of Wall Street strategists shows their recommended allocation to stocks is the lowest it’s been since 2009 during the worst of the financial crisis, while much of the economic data is much improved from where it was. Which evidence is more compelling?

Several of our recent Great Investor and Financial Thought Leader guests are asking themselves the same questions and uniformly are reaching the same conclusions: that investor pessimism, particularly in the U.S., is way overdone and that the most contrarian action you can take is to buy some stocks for long term portfolios.

This week’s guest is no exception. Bob Doll is a widely followed strategist and portfolio manager, an unusual combination at major Wall Street firms, who has excelled in both disciplines. Now a consultant to Blackrock, until recently he was Chief Equity Strategist,  head of the U.S. Large Cap Series Equity team and lead portfolio manager for the Large Cap Core, Value and Growth mutual funds, which he also ran while at Merrill Lynch Investment Managers, where he was President and Chief Investment Officer. I began the interview by asking Bob to step way back from the noise of the day and share his longer term views of where we are and where we are heading. My first question was why, after the worst decade since the 1930’s, he is predicting that stock returns in this decade will be in the high single digits.

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WEALTHTRACK Episode #904; This program was originally broadcast on July 20, 2012.

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Guest Info

Bob Doll
Consultant
BlackRock

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Consuelo MackThere was a counter culture novel published in the 1960s, titled I’ve Been Down So Long It Looks Like Up To Me, a phrase later memorialized in a song written by Lee Hazelwood and picked up by the rock band The Doors that just might describe where market psychology is today. As last week’s guest, economist David Rosenberg wrote recently the phrase “consumer confidence is an oxymoron” and consumer confidence is “mired in recession territory.” As Rosenberg points out, “we are supposedly in the third year of a recovery, but confidence is below the level that would be consistent with economic contraction.” As he noted he is “noticing a certain degree of despair these days, just as I am getting enthusiastic about the future.”

Then there are investor views of the stock markets. According to next week’s guest, strategist Francois Trahan, one survey of Wall Street strategists shows their recommended allocation to stocks is the lowest it’s been since 2009 during the worst of the financial crisis. Trahan points out most of the economic data is much improved since then, even taking into account the recent softening we are experiencing here. Which evidence is more compelling?

Several of our recent Great Investor and Financial Thought Leader guests are asking themselves the same questions and uniformly are reaching the same conclusion: that investor pessimism, particularly in the U.S. is way overdone and that the most contrarian action you can take is to buy some stocks for long-term portfolios.

This week’s guest is no exception. Bob Doll is a widely followed strategist and portfolio manager, an unusual combination at major Wall Street firms, who has excelled in both disciplines. Now a consultant to BlackRock, until recently he was Chief Equity Strategist, head of the U.S. Large Cap Series Equity Team and lead portfolio manager for the Large Cap Core, Value and Growth mutual funds, which he also ran while at Merrill Lynch Investment Managers, where he was President and Chief Investment Officer.

I’ll begin the interview by asking Bob to step way back from the noise of the day and share his longer term views of where we are and where we are heading. My first question is why, after the worst decade since the 1930’s, he is predicting that stock returns in this decade will be in the high single digits. That’s still below the performance we grew accustomed to in the 1980’s and 1990’s but it would certainly be a welcome change.

As always, if you can’t join us at the appointed hour on your local public television station, you can watch the show on our website as a podcast or streaming video. You can also find the One Investment picks of our guests and my Action Points there.

For those of you who would like to see our program 48 hours in advance of the broadcast, you can subscribe to our WEALTHTRACK PREMIUM subscription service on the website.

Have a great weekend and make the week ahead a profitable and a productive one!

Best regards,

Consuelo

Action Point

  • Consider expenses to cover & consider time frame needed
  • Near term liabilities = stable, less risky investments
  • Long term obligations= allocation to more risky investments providing growth over longer time frame

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GREAT CASH FLOW

– Buy U.S. companies with great cash flow

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Archive

01/06/2012
An exclusive interview with Wall Street’s long time number one economist Ed Hyman and Great Investor Bob Doll. What they expect in the economy and markets in 2012 and strategies to prosper in it. WEALTHTRACK Episode #828

01/06/2012
An exclusive interview with Wall Street’s long time number one economist Ed Hyman and Great Investor Bob Doll. What they expect in the economy and markets in 2012 and strategies to prosper in it. WEALTHTRACK Episode #828

 


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