Monday, April 23, 2012

Money Manager Forecasts - Notable Excerpts From Barron's

The April 23 edition of Barron’s has a cover story titled “Reason To Cheer.”

The story contains the results of the "Spring 2012 Big Money Poll" and related commentary.

As described in the story:
THE BIG MONEY POLL is published twice yearly by Barron's, in the spring and fall. The latest survey, prepared with the help of Beta Research in Syosset, N.Y., reflects the responses of 125 money managers nationwide. Some run small or mid-size investment firms, while others manage billions of dollars for banks, mutual-fund companies, endowments, and other institutions. The latest poll was mailed to participants in mid-March.
Included in the story are a variety of forecasts regarding the markets and economy.

I found a few of the statistics to be especially notable, including:
Only 14% of Big Money men and women identify themselves as bears these days, down from 17% last fall. The fence-sitters, or the neutral cohort, are holding steady at 31% of respondents. The bears' mean prediction puts the Dow at 12,185 by December's end and 11,738 by next June, the latter down 10% from current levels. In the skeptics' view, the S&P 500 could revisit 1301 before falling to 1243, while the Nasdaq could tumble to 2693 by mid-2013 from 3000 now.
As well, in response to the question "Which is most likely to occur in the U.S. in the next 12 months?" , the most popular response from all of the respondents was "inflation" at 52%, followed by "None will occur" at 26%, "Stagflation" at 18% and "Deflation" at 4%.

As to the question "Will analysts raise, lower, or maintain their current 2012 consensus estimates for S&P500 profits?" 49% replied "lower", 34% replied "raise", and 17% said "maintain."

I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1364.77 as this post is written

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