Tags: Birinyi | laszlo | Buy | Stocks

Investment Guru Birinyi: Buy Stocks During Slump

By Bill Spetrino   |   Tuesday, 01 Jun 2010 08:09 AM

The stock market’s weakness in recent sessions hasn’t dented the bullishness of investment guru Laszlo Birinyi.

“I am not of the view that we’re going into a 20 percent downdraft,” he says. “We are buying to take advantage of this weakness.”

“Emotion and political circumstances are dictating the short-term move, and understandably,” said Birinyi.

“But ultimately it comes down to good companies and proper valuations, and I don’t think there’s a big issue,” he told Bloomberg.

U.S. corporate profits remain strong, and valuations are still attractive, he says.

Analysts anticipate a 17 percent earnings gain for S&P 500 companies this year, putting the index’ price at a moderate 13.2 times earnings, according to Bloomberg data.

The S&P may gain more than 10 percent by year-end, according to Birinyi.

He says he’s been buying shares of Chipotle Mexican Grill, Freeport-McMoRan Copper & Gold and Oil Services HOLDRS Trust, an exchange-traded fund.

Other experts say the market is likely to avoid a plunge too.

"It's a very tough call to make, but I come down on the side that it's more likely to be a correction," Stu Schweitzer, global markets strategist at JPMorgan's Private Bank, told the Associated Press.

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The stock market s weakness in recent sessions hasn t dented the bullishness of investment guru Laszlo Birinyi. I am not of the view that we re going into a 20 percent downdraft, he says. We are buying to take advantage of this weakness. Emotion and political...
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