All You Need to Know about Round Two of the Roundtable

22 Jan

I got up early and read the paper so you don’t have to. The following is the “Cliff Notes” version of round two of Barron’s Roundtable:

Felix Zulaf – we’re in a trading range, get long volatility. There is a growing world middle-class so put some agriculture in your portfolio.  While you’re at it, add some uranium exposure because energy demand is going to rise too. Greece is in a deflationary spiral and will cause the Euro to decline eventually hurting Germany. Finally, gold – it could fall short-term but it has “unlimited” upside, buy the dip!

Archie MacAllaster – moderately bullish and has a penchant for dividend paying stocks (with prospects for hikes). He likes a couple of large-cap life insurers because they are cheap relative to earnings, which are on the uptick but still well below peak levels. He also continues to like Wells Fargo (NYSE: WFC) for the long term. His speculative play is Delta Air Lines  (NYSE: DAL) because it is part of the quasi-monopoly that is the airline industry.

Fred Hickey – likes gold because, despite a 10 year run, it still hasn’t had a “speculative” phase. Unlike Zulaf, he likes the miners in addition to the hard asset. Tech companies have run too far, Salesforce.com (NYSE: CRM) has a P/E of 250. However, he’s not shorting stocks because we are in a money printing environment. He likes big-cap tech which have lagged. Finally, he is buying Canadian government bonds given that the country has come out relatively unscathed from the Credit Crisis and even raised rates three times last year.

Bill Gross – we are in a deleveraging cycle, get ready for surreptitious defaults. Savers are under attack. U.S. rates will be low for a “long, long time” so you want to invest in countries with higher real rates: Brazil, Canada and Mexico. He suggests borrowing at low US rates (just like the banks) and capturing the spread.  He then proceeds to recommend (surprise, surprise) one PIMCO fund that he manages  which can utilize up to 50% leverage (I refuse to give him free ad space here). His only other pick was Annaly Capital Management (NYSE: NLY) a mortgage REIT that own government agency mortgages and borrows against them.

Now you can enjoy more of your weekend.

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4 Responses to “All You Need to Know about Round Two of the Roundtable”

  1. The Analyst January 24, 2011 at 5:28 am #

    While I despite Gross perpetually talking his book (not that I’d do much different were I he), Canada is likely going to be selectively F’d. Alberta, I’m looking at you (residential real estate, almost purely levered to shale/sands and oil trade)…

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