NEW YORK (Reuters) - Billionaire investor Ken Fisher believes bullish sentiment among investors might be getting a little too long in the tooth as large-cap U.S. stocks have doubled in price since their March 2009 lows.
Fisher, who scoffed in October at widespread bearish sentiment at the time, said on Tuesday his enthusiasm has waned. A pause may be in order, he said.
“I’m more neutral on stocks than I’ve been in years,” said Fisher, who is chairman, chief investment officer and founder of Fisher Investments, a money management firm in Woodside, California that oversees about $43 billion in assets.
“I’d not be overly optimistic right now,” said Fisher, who has backed the market’s rally since March 2009, a run-up many investors doubted.
Fisher’s lukewarm stance contrasts with a monthly survey of global fund managers from Bank of America-Merrill Lynch on Tuesday that showed investors in February were the most bullish on stocks in nearly 10 years, with 67 percent of respondents overweight equities. For details see:
Markets have likely entered a period of an ever-widening dispersion of returns around the mean, said Fisher, a well-known author of books about investing who has written a popular column for Forbes magazine for more than 25 years.
Those who are nimble as stock pickers or market timers will have a reasonable year, while those who try to emulate whatever worked the past four years — such as betting big on market upside or downside, will be frustrated, he said.
The so-called macro bet Fisher is referring to comes against the backdrop of double-digit gains in the benchmark Standard & Poor's 500 Index .SPX, which is up nearly 23 percent since September.
Although often taken to task for being too bullish, Fisher says the label misrepresents his record. An astute market observer who is steeped in its history, Fisher said sentiment now looks like a barbell, either hot or cold, instead of its normal appearance of a Bell curve — fat in the middle.
The Bell curve refers to the normal distribution of any measurement, and is formed by a sharply rising line that descends on both sides of the curve.
The barbell aspect of the market is rare but usually occurs in the middle of a bull market, and indicates a “pause that refreshes” before the bull market resumes, perhaps in 2012, with gusto, Fisher said.
“The bears are right that there are too many bulls who became encouraged by the last two years’ rise,” Fisher said.
“But they’re wrong because there are also too many bears — both dug-in-their-heels types and newly fashioned acrophobes
— the reverse of those who became encouraged by the last two years,” he said in an e-mail.
Fisher Investments caters to high net worth and institutional investors. A typical portfolio at the firm returned 15 percent in 2010, in line with the reinvested returns of the Standard & Poor’s 500 Index.
Reporting by Herbert Lash; Editing by Andrew Hay