Last September, sentiment towards the global economy was pretty gloomy, and it was reflected by tumbling stock prices. The S&P 500 was trading at around 1150.Right then, David Bianco—Bank of America’s Chief U.S. Equity strategist at the time—did what few strategists of sound mind would do. He raised his 12-month target on the S&P 500. Specifically, Bianco boosted his target from 1400 to 1450.
Unfortunately, his call drew some harsh criticism from the financial blogsphere. FT Alphaville wanted to know what he was smoking. Zero Hedge said he was “perfectly oblivious” of what was going on in Europe.
Anyway, it’s still too early to tell if Bianco will hit his 12-month target, but he’s getting close.
Also, there was one extraordinarily brilliant insight from his note that he totally nailed:
Discipline & courage earn gains—S&P 500 typically rallied 15%+ Sep-Jan when priced for a recession that didn’t come.
Since his note was published, a recession didn’t come and the S&P 500 has risen 16 per cent.
UPDATE: Sources tell Business Insider that Deutsche Bank has hired David Bianco to be its new Chief US Equity Strategist. Read about it here >
Photo: Google Finance
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