Laszlo Birinyi, one of the first money managers to tell clients to buy before the bull market began in March 2009, said investors should buy commodity and technology shares as the rally enters its fifth year.
“People are now starting to realize that it is a bull market,” Birinyi said in an interview on Bloomberg Radio’s “Surveillance” with Tom Keene and Michael McKee. “It’s not going to come back, you’ve missed the train, and the train still has a long way to go. But you better get on it.”
The Dow Jones Industrial Average rose to its highest level ever today, erasing losses from the financial crisis after a four-year rally fueled by the fastest profit growth since the 1990s. While consumer staples and health-care shares have led the almost 8 percent advance for the Standard & Poor’s 500 Index in 2013, Birinyi said technology, materials and energy stocks are the best choices today.
“Banks may have run their course,” said Birinyi, president of Birinyi Associates Inc. in Westport, Connecticut. “The strong economic stocks are where we’re starting to find ways to play the market.”
Salesforce.com Inc., the largest maker of online customer-management software, is an example of a well-performing cyclical stock, he said. It’s gained 30 percent in the past 12 months, compared with a 13 percent advance in the S&P 500, as earnings exceeded analyst projections, Bloomberg data show.
Birinyi earlier this year said the S&P 500 had a more than 50 percent chance of climbing past 1,600 this year. The index is within 3 percent of surpassing its 1,565.15 record set in October 2007 after closing at 1,525.20 yesterday.
As the bull market starts its fifth year this week, extending beyond the average length of cycles since 1962, it is in the midst of its final stage, in which three past bull markets have gained 20 percent, according to Birinyi.
“We think there’s that possibility here, and if not we still have a very good market,” he said. “We’re in the fourth leg, which is where you get some really good moves.”