Billionaire investor Ken Fisher thinks stocks are fairly valued right now and put his money where his bullish views with a robust buying binge.
Fisher reportedly added 118 stocks to his portfolio that comprised 786 positions at the end of the third quarter.
He placed the majority of his portfolio in three sectors: Financial services occupies 21.6%; technology represents 19.1%; and ETF, options and preferred total 15.2%, Guru Focus reported.
At the end of the third quarter, the value of the stocks in this portfolio totaled $67.5 billion.
Fisher, who founded wealth management firm Fisher Investments in 1979, was bullish in a recent USA Today op-ed article.
“Markets live to surprise most people, most of the time,” he wrote. “The surprise now will be stocks continuing to rise,” he wrote.
Fisher thinks stocks are “cheap” right now.
“The only right time to fear valuations is when virtually no one does. With so many hanging hard to the notion that ‘expensive’ stocks won’t rise — it makes rising stocks the most likely possibility,” Fisher said. “Bet on it. The bull market is firmly intact.”
To be sure, investors are increasingly pricing in the effect of a corporate tax cut into the shares of U.S. companies, leaving the market primed for a steep selloff if the Republican-controlled Congress fails to pass one of President Donald Trump's top priorities.
The benchmark S&P 500 is up nearly 6 percent from its August lows as the Trump administration has rolled out its tax reform proposal, which would cut corporate taxes to 20 percent from the current 35 percent and allow companies to bring back some of the $2.6 trillion in cash currently held offshore at reduced rates, Reuters reported.
Bank of America Merrill Lynch said that a positive boost from taxes "had been priced out of stocks" in July but "has been making a solid comeback."
Yet there are signs that the Trump administration has little room for error as it gets ready to introduce its tax legislation next week. The House of Representatives narrowly passed a budget measure on Thursday necessary for a vote on a tax bill, with Republicans from such high-tax states as New York and New Jersey among the opponents out of concerns that a bill would eliminate the deduction of state and local taxes.
Trump must also stem potential revolts over a proposal to scale back the level of tax-deferred contributions to 401(k) retirement savings plans, which many middle-class Americans rely on for their retirement.
"The nature of the rally over the last two months has been tax-cut led. If we don't get a cut then the market is going down" several percentage points, said Edward Perkin, chief equity investment officer at Eaton Vance.
(Newsmax wire services contributed to this report).
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