Yesterday our favorite Pied Piper, Ken Fisher, was quoted by Bloomberg predicting 1,300 on the S&P 500 (+19% from Monday’s close):
“It’s just a reversal of excessive pessimism. We still have a lot more bull market to go because we had such a huge bear market.”
Ah, to live in Ken Fisher’s oversimplified dreamworld. The tide goes out and returns. If it goes way out the recovery is that much greater. Classic “V” bottom. This applies to both the stock market and economy. As long as the Fed is accomodative and “applying liquidity” investors have the green light:
“The economy is not recovering at a slow pace. America is faster than people think. Third-quarter GDP numbers knocked the socks off of expectations.”
Not surprisingly, Fisher is overweight industries most levered to economic recovery: raw materials, industrials, consumer discretionary, technology, and emerging markets.
We’ve been critical of Ken Fisher for the past seven years, figuring his faith in Keynesian economics and super-sized ego would eventually take him off the rails. In an August 23, 2007 FT.com op-ed he declared the 6-month old credit crunch “phony.” A few days later we blogged about Fisher with this conclusion:
Ego, rationalization, and delusion are hallmarks of manias. Ken Fisher displays these in spades. He is predictably digging in his heals after going public recently with his bullish views and will likely go down as one of the great casualties of the bust now in progress.
After such a bloodletting, Fisher and his ilk should be eating humble pie. Instead they’re crowing about economic recovery and a fresh bull market. There is no recovery short of a government-induced sugar high. The next leg down will be brutal for Ken Fisher and his lemming followers. “Invest assured,” people.
Forbes columnist, best-selling author, billionaire, and self-proclaimed investment genius Ken Fisher watched his Purisma Total Return Fund (PURIX) drop 5.37% yesterday. His benchmark, the MSCI EAFE Index, lost 4.37%. Year-to-date, Purisma is -30.45% vs. -31.92% for EAFA. Such mediocre performance wouldn’t be noteworthy except that Fisher built an aggressive marketing machine which hyped his ability to protect investors from bear markets. The financial media has remained suspiciously silent, I suspect because Fisher’s massive ad budget swells their coffers.
Fisher also sticks out due to his cocky prognostications throughout this bear market:
Headlines herald a U.S. prime-time, subprime mortgage implosion leading to an upcoming credit-crunch crisis – destined to sink shares, raise interest rates and impale economies. But this is demonstrable nonsense… Fact is, subprime is a relatively small part of the overall debt market and the talk is much ado about little. And if I’m wrong about that? Then you get those widening spreads to warn you. And take cover fast. Until then, be bullish and enjoy watching the bears impale themselves. They are good at it.
~ article written for FT.com, July 17, 2007
As the Fisher sales literature says, “invest assured.”
His latest op-ed, “History teaches this is just a bull market correction,” appeared on FT.com August 23. Here are a couple of gems:
Conclusion: this is a much ballyhooed, much ado phony credit crunch, not yet recognised as such.
A few months from now this will all blow over and we will wonder what the noise was all about, as is the case with all corrections. As with all corrections the media were on it fast, unlike early in bear markets when they never are.
My comment: Ego, rationalization, and delusion are hallmarks of manias. Ken Fisher displays these in spades. He is predictably digging in his heals after going public recently with his bullish views and will likely go down as one of the great casualties of the bust now in progress.
Ken Fisher’s marketing juggernaut marches on. I just saw his slick Hal Holbrook ad appear on the Biography channel of all places.
“Fisher Investments. Invest assured.”