No New Normal for Nygren
In his most recent shareholder letter, Oakmark's Bill Nygren takes issue with the gloom and doom view.
Bond giant PIMCO's mantra lately has been The New Normal. By this, Bill Gross, Mohammed El-Erian, Paul McCulley, and others at the Newport Beach, Calif., juggernaut mean that the economy will eventually recover from the recent crisis, but GDP will not sprint ahead with prodigious gains anytime soon. Stability after the recovery will mean very low-single-digit growth.
It isn't just bond managers who have tepid forecasts, though. As my colleague Ryan Leggio pointed out recently, Jeremy Grantham and John Hussman think the stock market's dramatic runup has left stocks reasonably priced at this point, despite the fact that we are well off the market highs of 2007.
Contrast these subdued outlooks to Bill Nygren's most recent, optimistic shareholder letter for Oakmark (OAKMX) and Oakmark Select (OAKLX), published on Oakmark's Web site Friday. Nygren appears to take issue specifically with gloom-and-doom media-types, and he talks more about corporate earnings than macroeconomic indicators like GDP. Still, the dissimilarity to the opinions of other asset managers, including those of the bond behemoth on the beach, is striking.
John Coumarianos has a position in the following securities mentioned above: MMM, MSFT, JNJ. Find out about Morningstar’s editorial policies.