As some bulls turn to bears, others see more gains for stocks

While a number of bears have capitulated and now see stocks rising further, some bulls have flipped to the bear side. From Bloomberg today:

... BlackRock Inc.’s Laurence Fink and Doug Kass at Seabreeze Partners Management Inc. said this month that stocks were headed for losses after an almost uninterrupted rally that lifted the S&P 500 in one of its broadest advances on record...

“Traders and investors, strategists and pundits are now almost historically complacent,” Kass...said in a Nov. 12 Bloomberg Radio interview with Tom Keene and Michael McKee. “They’re glib.”

Kass has grown more bearish on the S&P 500 since he said a year ago that fears were overblown and called for the S&P 500 to rise to a record. “I have more than one foot out the door and I’m looking for short opportunities,” he said this month.

Stocks may decline as much as 15 percent because of political risks in China, Japan, France and the U.S., according to Fink, whose New York-based BlackRock is the world’s largest money manager with $4.1 trillion in assets. Last year Fink said he would invest all of his personal wealth in equities.

However, many other investment managers remain positive on stocks.

Craig Hodges, who runs one of the best-performing U.S. mutual funds, is preparing for the next leg of America’s almost five-year-old bull market...

“We’ve got another two or three years of a good stock market,” said Hodges, whose Dallas-based Hodges Fund is beating 99 percent of its peers with an increase of 55 percent...

To James Paulsen at Wells Capital Management Inc., the prospect of a tumble remains a longshot.

“Confidence is still barely average by historic standards,” the Minneapolis-based chief investment strategist at Wells Capital, which oversees about $340 billion, said in a phone interview...

“It’s still a buy-on-the-dips equity market,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said in a phone interview from Minneapolis...

“Retail investors are shifting into equities,” Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees $367 billion, said by phone. “It certainly bolsters the chance for stocks to continue to rise. It is a source of demand for shares”...

“There’s clearly a lot of suspicion and doubt in this bull market, and that in and of itself gives it further fuel,” Rich Weiss, the Mountain View, California-based senior portfolio manager for American Century Investment who helps oversee $130 billion, said by phone Nov. 21. “Not everybody is in. The level of exuberance can clearly grow.”