Stock guru sees extended run-up for stocks; ‘everybody into the pool’

My Comments: Laszlo Birinyi is one of those people who have made both good and bad predictions before yet are almost always seen as having a better insight into the future than the rest of us.

Whether we hit a record high in 2013 or not, my educated guess is that this is going to be a strong year for the stock market. As always, the markets will not move in a straight line, but you need to get off your duff and make sure you are properly exposed to stocks in 2013. And if we both turn out to be wrong, I have a solution that will help you grow your money regardless of the outcome.

December 31, 2012 9:31 am ET

Expansion in U.S. housing, recovering markets in Europe where bank shares have rallied 36 percent since June and buying by individual investors will push the advance in equities to its fourth and final stage, “acceptance,” said Birinyi, the president of Birinyi Associates Inc. The benchmark gauge for American equity is within 11 percent of its record after gaining 107 percent since March 2009, data compiled by Bloomberg show.

Birinyi, the former Salomon Brothers Inc. executive, is sticking to the bullish forecast he has given to clients of his Westport, Connecticut-based research firm since stocks hit a 12- year low following the credit crisis four years ago. The 69- year-old money manager says the bull market that began in March 2009 resembles advances that pushed equities up more than threefold in the 1980s and fourfold in the 1990s.

“We’re still very comfortable with the market,” Birinyi said in a telephone interview on Dec. 20. “Our view all along since 2009 is that we’re in the midst of a protracted bull market, similar to 1982 and 1992, markets that went on for four or five years.”

Equity Value

More than $8.4 trillion has been restored to U.S. share values since the rally began, according to data compiled by Bloomberg. The S&P 500 slipped 1.9 percent to 1,402.43 last week, trimming its 2012 increase to 12 percent. At about 4 p.m. in Hong Kong, S&P 500 futures indicated a decline of less than 0.6 percent when U.S. exchanges open today as Congress worked to reach a budget agreement. Senate Majority Leader Harry Reid said that while “significant differences” remain between Democrats and Republicans, negotiations are continuing.