The “bottom has been made” in U.S. equities.
[I]t is obvious the credit crisis will end, and it is obvious the housing crisis will end, and that credit markets will function satisfactorily and house prices will stop going down and then start moving higher. It is obvious that the American consumer will spend sufficiently to keep the economy moving forward long term. It is obvious that the U.S. economy, already the most productive in the world, will get even more productive and will adapt and grow. It is obvious stock prices will be higher in the future than they are now. [No time horizon specified, thank goodness.]
‘I think we will do better from here on, and that by far the worst is behind us. If spreads continue to come in, the write-offs at the big financials will end, and we may even have some write-ups in the second half instead of write-downs.’
And then there’s this from today, which unfortunately provides more fodder for those who believe in mean-regression, index funds, passive management, etc:
Performance over the year-to-date, one-, three- and five-year periods for [Bill Miller’s] Value Trust put it at the bottom of the barrel among its peers, Lipper data shows.
(For those who don’t know Bill, he and his team put up extraordinary numbers more than a decade, beating the S&P 500 for 15 years in a row…a remarkable streak that ended a couple of years ago. To his credit, as Bill’s fame and legend grew, he was always quick to suggest that this streak might have been luck. It wasn’t–he’s smart as hell–but the last few years have shown just how powerful mean-regression is.)