DOW 30K; The Market’s Big Run; What To Buy Now, & What Could Go Wrong

DOW 30K; The Market’s Big Run; What To Buy Now, & What Could Go Wrong
      This weekend’s (Jan. 20, 2020) Barron’s had a feature article, interviewing top Wall Street strategists on what to buy now after this great bull run in stocks; and, what could go wrong and derail this record run. Leslie P. Norton’s feature article, “What To Buy Now,” was the result of an extensive interview with five [investment strategists/managers] Barron’s Roundtable members who provided 26 stock ideas for investors to consider as we close in on the first month of 2020. I refer you to Ms. Norton’s article in Barron’s to get the full background and rationale for their stock picks.
     The five strategists Barron’s interviewed were: Rupal J. Bhansali of Ariel Investments; Henry Ellenbogen of Durable Capital Partners; William Priest of Epoch Investment Partners; Meryl Witmer of Eagle Capital Partners; and, new to Barron’s Roundtable, James Anderson, of Ballie Gifford. Ms. Norton writes that the “26 ideas, include stocks to sell short, and some that their champions believe, could pile on the capital appreciation. There were some pretty tasty choices for income investors too, such as an auto maker with a 5.4 percent dividend yield. There also were ideas on how to get global exposure through shares of enterprises in South America, Europe, and Asia.”
     Mr. Priest’s pickes are: Bausch Health (BHC); Takeda Pharmaceuticals (TAK); Walt Disney (DIS); Centene (CNC); and Woodward (WWD).
     Mr. Bhansali’s long picks are: Subaru (FUJHY); China’s Baidu (BIDU); China Mobile (CHL); and, GlaxoSmithKline (GSK). 
     Mr. Bhansali is short: Softbank Group (SFTBY); Apple (APPL); Netflix {NFLX); and Global Payments (GPN).
     James Anderson’s picks are: Meituan Dianping (3890.Hong Kong); Alibaba Holding Group (BABA); ASML Holding (ASML); Spotify Technology (SPOT); Kering (KER.France); and TESLA (TSLA). Meituan is a Chinese delivery company that has a 65 percent market share Ms. Norton noted; while ASML “is not the global monopolist on lithography, the technology that provides patterning on wafers.
     Mr. Ellenbogen likes: Redfin (RDFN); Bright Horizons Family Solutions (BFAM); and Service Master Global Holdings (SERV).
     Ms. Wtimer likes: Bed Bath & Beyond (BBBY); LafargeHolcim (LHN.Switzerland); and Lanxess (LXS.Germany).
     As with any and all investments — understand your risk tolerance, time horizon and do your own due diligence and homework before taking a position.
What Could Go Wrong?
     The title above comes from Randall Forsyth’s article in this weekend’s Barron’s. Mr. Forsyth begins, “the bond market has been the stock market’s best friend in the run toward DOW 30,000. Could the debt market also become equities’ biggest barrier to topping that mark?” He adds, “the symbotic relationship between the equity and debt markets — which has helped lift the DOW, the S&P, and NASDAQ Composite to record heights — and could be threatened in a rise in bond yields [currently] unanticipated by consensus forecasts.”
     “A big bump in bond yields will come only when inflation breaks out,” writes Peter Berezin, BCA Research’s Chief Global Strategist.
     Having said all that, a major trade deal with China should provide a tailwind to this market — IMO. RCP,


  1. Thank you for another wonderful post. Where else could anyone get that type of information in such a perfect way of writing? I’ve a presentation next week, and I am on the look for such info.

  2. I do like the way you have framed this particular problem and it does provide us a lot of fodder for consideration. Nevertheless, through everything that I have personally seen, I just simply hope when the remarks pack on that folks continue to be on issue and in no way embark on a soap box of the news du jour. Yet, thank you for this fantastic point and while I do not necessarily concur with this in totality, I respect the point of view.

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