Eye on Style
Ed Yardeni spent many years as a prominent stock strategist on Wall Street before leaving New York last year to join Akron, Ohio, money management firm Oak Associates. He's written an interesting piece this week called "What's in Style?" that makes a compelling case for large-cap growth investing -- not surprisingly, the strategy Oak favors.
As he explains, "I wouldn't have left a perfectly good career as an investment strategist on the 'sell side' of Wall Street if I had thought that the Large-Cap Growth style would remain challenged over the rest of the decade."
Yardeni has long predicted a "Global Synchronized Boom" in the economy and thinks technology, financial, materials, energy and industrial stocks will benefit most.
Here's an interesting sideline in the piece: Yardeni muses about the difference between the "buy-side" (mutual funds and other money managers) and the "sell-side" (the brokerage firms that execute their trades). He notes that Wall Street strategists typically advise their customers on the buy-side how much money to put in stocks, bonds, and cash when most portfolio managers stick with a specific style -- such as small-cap value or large-cap growth -- and remain fully invested, no matter what the market is doing
"In my opinion, Wall Street's strategists probably spend too much time sharing their forecasts and insights with the wrong customers."
Food for thought!