I don't know Mr. Barish but he seems to know what he's talking about.
From Bloomberg:
Energy and industrial companies will rise next year, propelling a 17 percent gain in the Standard & Poor’s 500 Index from its current level, according to Cambiar Investors LLC’s Brian Barish.
Next year will be marked by a “multi-speed recovery” as industries weakened by the recession, such as financial companies, lag behind those that are healthy and have cheap valuations, Barish said in an interview. He said stocks will perform better than would be expected under the “new normal” theory of the economy championed by Pacific Investment Management Co., owner of the world’s biggest bond fund, which says growth will be relatively slow in coming years.
“The bleeding has stopped,” said Barish, who oversees $5.7 billion in assets as president of Denver-based Cambiar, including the Cambiar Aggressive Value fund, which has beaten 99 percent of peers over the past year. “The market multiple is very low on earnings, and it doesn’t seem that big a stretch to me to see that multiple expand.”
The S&P 500 has risen 75 percent since its low in March 2009 to yesterday’s closing level of 1,180.55 as confidence in earnings and the U.S. economy has risen. Its price-to-earnings ratio is 15, below the 16.4 average in data compiled by Bloomberg going back to 1954.
The S&P 500 will rise to 1,300 by June 30 and 1,380 by the end of next year, based on the weighted average of estimates by Cambiar’s nine analysts. The average prediction of six strategists surveyed by Bloomberg is for a rise to 1,337 in the S&P 500 by the end of 2011.
No ‘New Normal’
The structural issues affecting the U.S. and European economies that led to the “new normal” prediction by Pimco are “more of a bond buyer’s problem than an equity buyer’s problem,” he said....MORE
