Tags: Birinyi | Wien | bullish | stocks

Birinyi, Wien Are Bullish on Stocks

Wednesday, 06 Mar 2013 12:00 PM

By Dan Weil

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While some experts are unimpressed with the stock market’s surge to record highs, investment luminaries Laszlo Birinyi and Byron Wien think the rally has further to go.

The Dow Jones Industrial Average touched a record high of 14,320.65 Wednesday morning, and the Standard & Poor’s 500 Index is only about 2 percent away from its all-time peak.

Birinyi, who heads Birinyi Associates, looks at the market in terms of fund flow. Net inflows to stocks have totaled about $27.75 billion so far this year, he tells The New York Times. And unless something unexpected occurs, that’s likely to continue.

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“There is still a lot of money sitting on the sidelines, and there are a lot of people who are still jumping in. That, in itself, is a good thing for the market,” he says.

“Market sentiment has not reached irrationally positive levels yet,” Birinyi notes. “That implies to me that the market is still grounded, and that it can keep on rising.”

Meanwhile, Wien, vice chairman of Blackstone Advisory Partners, thinks it’s the Federal Reserve’s massive easing program that is boosting the market.

“The old song on Wall Street is ‘Don’t fight the Fed,’ and that certainly has been the case in this market,” he tells The Times. “The Fed and other central banks have been driving the market, and there’s no sign that’s going to stop.”

Paul Hickey, co-founder of Bespoke Investment Group, thinks the market still has room to run. “We believe stock valuations are still reasonable, and that the momentum of the market will keep moving it upward.”

Erik Davidson, deputy chief investment officer at Wells Fargo Private Bank, shares Birinyi’s view that more investors are ready to take the plunge.

“Among clients and investors there is this newfound courage,” he tells The Wall Street Journal. They aren’t scared away by the economy’s meager 0.1 percent growth in the fourth quarter, Davidson explains. The economy “is a lot less worse than people had feared.”

Editor's Note: This ‘Third War’ Will Be the Most Destructive in History, Warns Pentagon Adviser

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