Read a recent interview with John Neff. Here's a few tidbits:
Is the current U.S. equity market reaching bubble proportions once again?
Neff: The current market is 17.5 times earnings. For 2004, I am using $60 for operating EPS on the stocks in the S&P 500. I think we have an almost ideal background for corporate profitability, and that $60 is up from roughly $53.50 for 2003.
Certainly a multiple of 17.5 times is high compared with what it was when I was managing Windsor (14 times or so). But I look at the alternatives. In the olden days, fixed income yields were in the double digits and money market funds yielded 5-6%. I think the market is going to hover around 17.5 times for 6-12 months with some carnage here and there but some decent performance on undervalued stocks. And then maybe starting in the summer of 2004, if I am right, we will see 3.5-4% growth in the economy, not only for 2004 but maybe for several years, with excellent productivity. The other day, Alan Greenspan, who is not given to superlatives, called productivity before Congress "astonishing," which it is. So I think the market is going to consider a 10-12% increase in earnings each year quite reasonable, and maybe the 17.5 multiple will remain in place, allowing the equity market to move up in lockstep with earnings growth.
What sectors do you currently like?
Neff: My personal portfolio recently reached a 40% allocation to homebuilders, primarily through appreciation. I am down to about 22% currently, but I still think it is an attractive sector. I also find financial intermediaries-thrifts, banks, and insurance companies- attractive.
keep an eye on RBOS....they are on the prowl...as stated by their Chairman...who knows, maybe they like NYb too.IF ...<big if>it becomes a biding war amongst foreign banks, maybe it will go higher...
reuters and bloomberg report HSBC bid for NYB..by my math looks like around 26 per share.
good call Lancer on buying more at the lowest point !
If goes thru I'll probably hold with HSBC,liked that one for a while, just never bought...whats yr view on HSBC? you seem to know banks pretty well...