Demand from Asia is spurring a bull market for computer and software makers, according to Barton Biggs, manager of the Traxis Partners LLC hedge fund.
“The big capital spending cycle, the last one, was from 1995 to 2000, and it was a transforming cycle,” Biggs, the managing partner of New York-based Traxis and former chairman of Morgan Stanley Asset Management, said in an interview today on “Bloomberg Surveillance” with Tom Keene. “The developments in terms of the cloud, storage and a whole series of new devices is the beginning of a new technology cycle.”
While the peak season for spending by technology companies was once Christmas, the cycle for semiconductor makers and companies such as Apple Inc. has changed to revolve more around the Chinese New Year in January or February, Biggs said
Biggs reiterated his view that equity markets may rise, citing increased projections for U.S. economic growth from Ed Hyman of ISI Group Inc. and Jan Hatzius of Goldman Sachs Group Inc. Hatzius boosted his growth forecast for the U.S. economy last week to a rate of 2.7 percent from a previous forecast of 2 percent.
“I feel really good about the markets here,” Biggs said. “Everything’s not perfect. The Case-Shiller, in terms of U.S. housing, and the European problems haven’t been solved. But nevertheless, it’s pretty clear the world is emerging from the soft spot it was in and we’re getting poised for pretty decent growth.”
Smallest Since January
The S&P/Case-Shiller index of property values in 20 cities climbed in September from a year earlier by the smallest amount since January, data last week showed. The S&P 500 fell to its low for the year, 1,022.58, on July 2 amid concern widening budget deficits in Europe could derail the global economic recovery. The benchmark measure of U.S. stocks slipped 0.2 percent to 1,222.51 as of 12:03 p.m. in New York today.
Biggs, who said his fund was up “low double-digits” in 2010, predicted that earnings by companies in the Standard & Poor’s 500 could be higher than $93 a share in 2011. He said half his portfolio is in emerging markets, primarily in Asia, with substantial positions in China and Hong Kong.
“There are all kinds of doomsayers wandering around mumbling about a bubble that’s going to burst,” he said. “China’s done a magnificent job of engineering a soft landing.”
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