Danoff to Rubenstein Say They’re Bullish on U.S. EconomyCharles Stein
Carlyle Group LP co-founders David Rubenstein and Bill Conway, and William Danoff, manager of the $85 billion Fidelity Contrafund, joined top investors expressing optimism about the U.S. economy as stocks rally.
Rubenstein and Conway, co-chief executive officers of Washington-based Carlyle, said in an interview with Bloomberg Television’s Erik Schatzker in Davos today they expect to do more deals this year as the U.S. grows 2 percent to 3 percent. Rubenstein, 63, said he was “very bullish” on the U.S. economy and Conway described it as “very strong.”
“Now is a good time to buy,” Conway, 63, said in the interview at the World Economic Forum.
Top investors including hedge-fund manager David Tepper have said they’re optimistic this year as the U.S. housing market recovers, stocks rally, Europe deals with its debt crisis and the economy in China shows signs of improvement. U.S. stocks rose today, briefly sending the Standard & Poor’s 500 Index above 1,500 for the first time since 2007, as an unexpected drop in jobless claims and better-than-forecast earnings offset a slump in Apple Inc.
Apple plunged the most in more than two years after posting the slowest profit growth since 2003. Shares dropped 10 percent to $460.20 at 12:22 p.m. in New York.
“I’m bullish,” Danoff, 52, said in an interview posted on the website of Boston-based Fidelity Investments. “Stocks are relatively cheap and U.S. companies have become much leaner.”
Danoff’s fund, which he has run since 1990, averaged annual returns of 12 percent for the past 22 years, compared with 9.1 percent for the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
Danoff, in the interview, pointed to improving conditions in the housing market and manufacturing as trends that will benefit the economy and the stock market. He described the global economy as beyond the crisis phase.
“If you are in cash you have to think really hard about it and say, ‘How much cash do I really need?’” said Danoff.
Goldman Sachs Group Inc. President Gary Cohn said he is “fairly bullish” on global stock markets because investors will shift money from bonds to equities as interest rates rise.
Rising rates, driven by greater economic activity, will also be positive for Goldman’s business, Cohn said in an interview with Schatzker today at Davos. Economists surveyed by Bloomberg expect the yield on the 10-year Treasury note to climb to 2.26 percent in the fourth quarter, from 1.86 percent today.
Tepper, who runs the $15 billion Appaloosa Management LP, said he is bullish on U.S. stocks as the economy is set to grow as much as 3 percent this year.
“This country is on the verge of an explosion of greatness,” Tepper said in a Jan. 22 interview with Stephanie Ruhle on Bloomberg Television’s “Market Makers.” “The key is to be long equities this year.”
Tepper, 55, made his last big call on equities in 2009, when his fund returned 130 percent betting on bank stocks in the aftermath of the 2008 financial crisis.
Carlyle is the world’s second-biggest manager of alternative assets such as private equity and real estate. The firm, which was founded in 1987, oversees $157 billion in assets.
The U.S. economy is expected to grow 2 percent in 2013, the median prediction of 83 economists surveyed by Bloomberg.