U.S. stock markets are oversold and may rally strongly in the next few days, said investor Barton Biggs, who runs New York-based hedge fund Traxis Partners LP.
“I think they’re going to stabilize in this general area, and then we’re going to have a significant move to the upside,” Biggs, whose flagship fund returned three times the industry average last year, said in a Bloomberg Television interview.
Biggs recommended buying U.S. stocks last year when benchmark indexes sank to the lowest levels since the 1990s. The Standard & Poor’s 500 Index rallied 23 percent in 2009 as governments worldwide mounted stimulus programs to counter a recession. On March 22 this year, Biggs told Bloomberg TV U.S. stocks had the potential to rally a further 10 percent. The S&P 500 has since declined 8.4 percent.
His views are at odds with Eric Sprott, manager of the best-performing Canadian mutual fund with at least $1 billion in assets in the past 10 years. The S&P 500’s month-long slump is the beginning of a collapse that will drive the measure below its weakest level of 2009 in the next year, Sprott said.
The $1 trillion European rescue package announced May 10 has failed to stop the global equity slump, indicating investors are skeptical that efforts to address the debt crisis will work, said Sprott, who manages the Sprott Canadian Equity Fund. He’s buying gold and betting against stocks.
“The European concerns are serious, and I take them seriously,” Biggs said. “I just don’t think that the worst is going to happen.”
STTG Market Recap May 21, 2013
19 minutes ago