Stock rally is turning even biggest bears into bulls
As the stock market continues its steady march upwards, it is attracting more bullish believers from even the most bearish precincts of Wall Street.
The most notable bear to join the bulls is Nouriel Roubini, whose nickname, Dr. Doom, tells you all you need to know about his past prognostications.
Roubini’s firm, Roubini Global Economics, is now making big bets on the stock market because of the firm’s faith in recent moves by the Federal Reserve and the European Central Bank.
“We’re a believer; we’re celebrating. We think the rally has legs,” Roubini’s director of stock strategy, Gina Sanchez, told CNBC.
Another skeptic who called the last financial crisis, Dean Baker, has also become a believer in the American economic recovery.
“I find the warnings of the pessimists -- the double-dip gang -- to be wrongheaded and seriously counterproductive,” Baker wrote on the Planet Money blog.
While stocks have wobbled Wednesday, they are up nearly 7% since the beginning of the year.
The optimism has led a man known as the bond king of Wall Street, Larry Fink, to suggest on Bloomberg Television on Wednesday that investors move as much as possible into stocks.
Fink was speaking to the millions of retail investors who have stayed out of the market for fear of another downturn, allowing big institutional investors to reap the gains from the current rally.
The cause for all this optimism is the growing body of evidence pointing to a solid American economic recovery -- including last Friday’s report showing a drop in unemployment -- and the signals from Europe that the continent may muddle through its sovereign debt crisis.
It is the spreading optimism, though, that is leading some market watchers to see this as the time to get out. Doug Kass, a long-time bear who turned bullish late last year, saw Roubini’s optimism and told his followers: “Sell everything.”
Even Roubini thinks the current rally is only temporary, and could be hurt by fundamental problems in the economy. But in the meantime, he and others see big opportunities for making money.
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