Barton Biggs: Better a Pig, than a Bull or a Bear
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October 10th, 2009 by AdvisorAnalyst
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Barton Biggs visits CNBC to discuss the market - Biggs says its better to be a pig in this market, rather than a bull or a bear. Funny thing is Biggs didn’t get to talk about this with Faber - instead they got down to the subject that there is more left in this rebound than investors imagine. The reference to being a pig comes from Biggs’ letters and a recent Newsweek article:
Biggs’ research looked back at past secular bear markets. Investors in past bear markets experienced an average drop from peak of 57% and a recovery from the trough of 78%. In some cases the recoveries from trough were in the 80 and 90 percent ranges. He pointed out further that this time around the drop from peak was 57%, and so far the recovery rally has provided a recovery of 45% out of the trough, hence his optimism that we may be only about halfway to the top of this market rally.
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Biggs believes there are strong opportunities left in Big Cap Technology, Pharma, and Oil Services - and he believes that China markets will rally strongly again in the 4th quarter, after a lull that began in Mid-June, and emerging markets in general.
“It takes courage to hold fast and be a pig, as they say on Wall Street—my money is where my mouth is.” - Barton Biggs
Biggs thinks we are only half way through this rally:
The market is only about halfway through what is historically typical of a bear-market recovery—and this time around, the rebound is likely to be even bigger, said Barton Biggs of Traxis Partners.
Traxis analyzed 14 past bear markets—ranging from gold to US stocks—and found that when markets dipped more than 40 percent, the average rally off the lows was about 72 percent, he said.
Since the Dow is up only about 45 percent and the S&P about 52 percent, the market still has a lot of room to the upside, Biggs said.
“We’ve had a tremendous, an unbelievable decline in both the economy and the stock market, and so I just think we’re going to have a bigger than normal bounce,” Biggs said. “I just think we’ve got further to go.”
Read more from the author/contributor here.
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