OT Ken Fisher
Prescient Bear Ken Fisher Says It's Time to Buy
By Mary Haffenberg
Staff Reporter
05/16/2002 02:09 PM EDT
A money manager and Forbes columnist who earned a wide following over the last two years for his staunchly bearish allocation has changed his tune and is now advising clients to plow 100% of their investment money into stocks.
Ken Fisher, head of the $12 billion Fisher Investment fund and a Forbes columnist since 1984, sent a letter to clients Monday saying it's time to buy.
That's a change from the 0% net equity allocations strategy Fisher's held since 2000 that consisted of a combination of longs, shorts and index puts.
"This might be a material bear market double-bottom," in other words, the start of an uptrend, wrote Fisher. He noted that the S&P 500 earlier this month was about where it was on Sept. 17 and the Nasdaq was where it was around Sept. 18, forming a double bottom with an eight-month base on the charts.
"At the same time, the levels of oversold-ness in today's market is perfectly consistent with any major bottom," Fisher wrote.
Fisher told clients that the major global equity markets could see a 20% bump over about five months.
In an interview, Fisher said he made the change in his portfolio strategy due to conclusions he's drawn based on analysis of supply and demand in the market. He's seen demand increase.
In particular, Fisher said he's now overweighted in the technology sector and in U.S.-based equities, as opposed to equities based "in the rest of the world."
"I look at demand and it's too low for the technology sector right now," he said, adding that he's neutral to the other sectors.
But Fisher went on to write in his letter that this may not be a "material bear market bottom. It may be that this is the beginning of a good-sized rally lasting from four to 18 months."
"As we move forward and the market rises, do we move into a period when demand becomes too high or does the market rise on a little increase in demand? It's the demand that will be the indicator," as to whether this is a pop in a bear market or a new bull market, Fisher said.
In his letter, Fisher told his clients that buying conditions now are right, whether it's the beginning of a short- or long-term rally, but he warned, "we may have to later abort our equity positions -- perhaps even before they reach long-term status. We will just have to play it as it comes at us, month-to-month, if need be."
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