Tags: Birinyi | stocks | S&P | Berkshire

Birinyi: S&P Could Reach 1,600 this Year

By Dan Weil   |   Friday, 01 Mar 2013 09:03 AM

Stock market guru Laszlo Birinyi, founder of Birinyi Associates, doesn’t think the party is over for equities yet.

Both the Standard & Poor’s 500 Index and the Dow Jones Industrial Average have hit five-year highs in recent days.

Stocks aren’t being driven by specific sectors, Birinyi tells CNBC. “This is a stock market rally, where people are looking at stocks.”

Editor's Note:
Billionaires Dump Stocks. Prepare for the Unthinkable.

Berkshire Hathaway is a stock that now “encapsulates everything,” he says. The Warren Buffett-led conglomerate has appreciated 13.8 percent so far this year.

“That tells me it’s not just the retail investor, it’s not short covering, it’s not high frequency trading. It’s real buyers buying real stocks,” Birinyi explains.

Presumably he means that because Berkshire itself is made up largely of shares in publicly held companies, a rise by Berkshire is reflective of a rise by other stocks as well.

Birinyi says this period may be comparable, to 1982 and 1990, two other years of economic weakness followed by heady stock market gains.

“We’re not suggesting they’ll be parallels, but don’t close the door on this idea,” he notes. “The market at this point in previous times has had some very good news.

“We talk about all the bad things that could happen. Good things could happen too.”

The S&P will likely reach 1,600 this year, a 6 percent increase from Thursday’s close of 1,514.68, Birinyi predicts.

Elliott Gue, editor of the StreetAuthority newsletters High-Yield International and Top 10 Stocks, isn’t so bullish. He thinks the weak economy will pressure stocks. “We’re likely to see a pretty significant correction,” Gue tells Newsmax TV in an exclusive interview.

But longer term, he is bullish. “One of the factors that’s really helping us is strong growth outside of the United States.”

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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