For several weeks, a rotation has been underway in the U.S. market, with money moving away from some...
Coming Soon: S&P Over 2,000
09/11/2013 6:00 am EST
The man Louis Rukeyser called "simply the world's number one stock picker," Laszlo Biriniyi talks about how long investors can expect the current bull market to last.
HOWARD: I am Howard Gold, Editor-At-Large for MoneyShow.com and a columnist for MarketWatch. I am here speaking with Laszlo Birinyi. Hi, Laszlo. How are you?
HOWARD: We last talked a couple of years ago early in 2011 when you made a very bold prediction for the markets. You said at that time that the S&P could go well over 2000 before this long bull market is over. How do you see that playing out now? So far, things have certainly been moving in the direction you said they would.
LASZLO: In my assessment, long bull markets are four stages and the fourth stage is exuberance. We are in the fourth stage but I don’t really think we have seen exuberance. We still haven’t seen people accepting the market. We haven’t seen the big headlines. We haven’t seen the magazine stories.
LASZLO: So, the stories still have a very negative bias to them and so I think the market still has a lot of potential.
HOWARD: We have seen huge inflows into stocks. I mean starting in July, we saw about $70 billion float into stock funds I think in one month. We are now in the middle of August where we’re seeing a correction so do you think individual investors are finally beginning to jump in after years of skepticism?
LASZLO: I wouldn’t say jump. I would say reluctantly hauled in but I think people are saying can we do it and, more importantly, still haven’t gotten to the point where the mailman talks about the stock markets or becomes a day-to-day conversation where all TV sets are turned to financial channels.
HOWARD: Well that might be new this time because I saw a report that about the lowering amounts of stock holdings individuals have had since the 2000 bust and since 2007 especially. Do you think maybe we will see people not show all that exuberance because of the older aging of the population and people just cutting down on their stock exposure?
LASZLO: I don’t think so. Again, I look at this in historic terms. We had the same sort of situation where people at the end of the day finally can’t stand the fact that their brother-in-law is making money and they are not or their stupid neighbor, and the messes being in their head for not doing it. Now, I still haven’t and, again, the realistic point.
HOWARD: But this bull market has gone on for now 54 months and isn’t that on the high side, we are starting to move into the high side? I mean, how long do you think it can go on? Can it go on a couple more years, a year, two more years?
LASZLO: I think it is a mistake in trying to look at things like average bull markets. We have said for a while it is going to be a significant bull market. Again, five years was a number. It could go on six or seven. What happens if the economy starts to pick up and surprises on the outside so I wouldn’t even try to call an end. We are just going one step at a time.
HOWARD: But, again, your target is still over 2000 on the S&P by the time this is over.
LASZLO: I think so. I am not at all uncomfortable. We revisit it and I am not one to put it on the shelf and then say call me when we get there. I have often suggested it is just like a trip across the country. First of all, you have to get to Pittsburgh and then you have to get to Indianapolis and St. Louis, so we will take one step at a time and not try to swallow it all at once.
HOWARD: Thank you very much.
LASZLO: My pleasure.
HOWARD: We have been speaking with Laszlo Birinyi on the MoneyShow.com video network.
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