Consensus Review
Ticker Sense recently published a 3-part year-end poll of financial blog writers (including WRA Strategies & Observations) on a variety of investment topics. A couple of area where we think it makes some sense to be contrarian to the consensus:
US Dollar: 62% are bearish. We'd take the contrarian bet on that one and opt for a flat to up dollar.
Gold: only 26% bearish. With inflation likely to surprise on the downside a short gold position seems to make some sense here.
Sector bet: bullish on technology. At best, technology will probably be a middle of the pack performer. The 6-0 bet against consumer discretionary is interesting and causes us to wonder if we should reconsider our negative bet there.
58% of participants believed that Growth will be the better investment style in 2007. We think that even though growth is a slightly cheaper than value currently, that the huge amount private equity cash sloshing through the system will continue to give the performance nod to value.
The most obvious stock pair to bet against is the consensus pick of AAPL over MSFT. Fundamentals would suggest that AAPL could see some multiple compression as growth momentum slows. Microsoft has a number of new product launches in 2007 and a much lower P/E ratio. Regarding GOOG, those predicting $700 are smoking something. The stock will come down to earth in 2007.
More on the equity market, interest rates, the housing market, recession probabilities and some individual equity picks on TickerSense. Check it out.
US Dollar: 62% are bearish. We'd take the contrarian bet on that one and opt for a flat to up dollar.
Gold: only 26% bearish. With inflation likely to surprise on the downside a short gold position seems to make some sense here.
Sector bet: bullish on technology. At best, technology will probably be a middle of the pack performer. The 6-0 bet against consumer discretionary is interesting and causes us to wonder if we should reconsider our negative bet there.
58% of participants believed that Growth will be the better investment style in 2007. We think that even though growth is a slightly cheaper than value currently, that the huge amount private equity cash sloshing through the system will continue to give the performance nod to value.
The most obvious stock pair to bet against is the consensus pick of AAPL over MSFT. Fundamentals would suggest that AAPL could see some multiple compression as growth momentum slows. Microsoft has a number of new product launches in 2007 and a much lower P/E ratio. Regarding GOOG, those predicting $700 are smoking something. The stock will come down to earth in 2007.
More on the equity market, interest rates, the housing market, recession probabilities and some individual equity picks on TickerSense. Check it out.
posted by WRA Strategy Group at 8:52 AM
1 Comments:
What "fundamentals" in AAPL says their growth is slowing? 30-40% growth YoY is "slowing"? And that doesn't include the iPhone, if it gets released. The stock should be over $100 right now if the street gave it the forward PE it deserves. Your bearish outlook is already baked in.
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