What The Late Barton Biggs Might Say About Stocks Today
The legendary former stock strategist at Morgan Stanley died Saturday from complications of a staph infection in his home in Greenwich, Conn. He was 79.
Biggs got a few major market moves wrong. Most notably, he missed the credit crisis in 2008.
Biggs did call the rest of the big market moves during his career correctly:
-- He predicted the start of the U.S. bull market in 1982. -- Biggs warned that Japan would collapse in 1989, before it did. -- He is best known for calling the U.S. stock market the “biggest bubble in the history of the world in 1999," a year before the crash. -- He correctly called the bottom for U.S. markets in 2009.
In 38 years as a strategist, Biggs was known to read about the markets voraciously – often while exercising. He kept tabs on many different data points, what company executives said and did, as well as what others were doing in the markets.
His research helped him to zig when others zagged, and to take positions contrary to the crowd.
One of his quotes from a recent essay reads, “Mr. Market is a manic depressive with huge mood swings, and you should be against him, not with him, particularly when he is raving.”
Biggs retired from Morgan Stanley in 2003 and formed the hedge fund Traxis Partners.
One of his last interviews was in May with Bloomberg TV. At the time, he said that he was bearish on Europe, but did not plan to add to his short positions. He had raised his bets on the S&P 500 earlier this year, and noted that the U.S. will avoid a double-dip recession.
Who knows for sure what Biggs would have said or done about the market's latest advance, up in four of the past five sessions despite one of the worst earnings warning seasons in memory.
He surely would have stumbled across this in his research:
Market bullishness is at its lowest point since August 2010, based on poll results released today.
Sure, the AAII survey is merely one data point of many.
Yet knowing Biggs' reputation for going against the grain, he just might have taken a contrarian view of that poll possibly with an eye toward taking some sort of bullish equity position versus the crowd.
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