Merrill's Bernstein Reiterates Bearish Sentiment
06 Mar 12:17
By Cheryl Winokur Munk
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- He works for the bull, but Richard Bernstein remains
bearish.
Bernstein, Merrill Lynch & Co.'s (MER) chief U.S. strategist, reiterated his
bearish sentiments Wednesday, in one of his first press events since being
named to the post in December. It's an unusual stance for a Wall Street
strategist to take when most are bullish.
Bernstein, the speaker at one of Merrill's regularly scheduled "bull
sessions" with reporters, stressed his belief in conservatism, quality and
diversification. He said that there remains an "outrageous opportunity" in
higher-quality assets for investors looking to hold them for two to four
quarters.
He noted that high-quality names are less expensive than riskier ones,
presenting what he believes is a tremendous opportunity. "People are paying
Bentley prices for Volkswagens and Volkswagen prices for Bentleys," he quipped.
In early December, Merrill replaced bullish strategist Christine Callies with
Bernstein, who has been the firm's chief quantitative strategist since 1998.
Bernstein, one of the few bears on the Street, said he's gotten a lot of calls
recently looking for his alternative view.
When asked whether he thought Wall Street frowns on bearishness, he
responded: "I really hope you're wrong," adding, "I don't think you can be a
permanent bull or a permanent bear and maintain your credibility."
For now, though, he's a bear. With wage growth still stronger than consumer
prices, Bernstein expects more corporate layoffs and thus unemployment to keep
going up over the next six to 18 months.
He noted that he had been too bearish on consumer cyclical stocks, but still
suggests caution. And he continues to believe that technology and telecom "are
way out of whack with what's going on."
Bernstein's recommended asset allocation is 50% stocks, 30% bonds and 20%
cash.
-By Cheryl Winokur Munk, Dow Jones Newswires; 201-938-2123;
cheryl.munk@dowjones.com
(This story was originally published by Dow Jones Newswires)
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