Tags: Hendry | Market | Washout | Opportunity

Hugh Hendry: One More Market ‘Washout’ Will Yield Once-in-Lifetime Opportunity

Tuesday, 01 May 2012 08:06 AM

Hedge fund manager Hugh Hendry expects there will be one more "washout" in the market that will create once in a generation buying opportunity for risk assets.

Hendry also believes the Chinese stock market is effectively a casino that only benefits insiders, and the rest of us have no reason to invest in it.

"This might be the year everyone else notices this; the year panic over Chinese economic growth comes to replace the market's morbid fascination with the travails of the European continent and the year in which we see that the U.S. is not giving way to China in terms of global economic leadership," Hendry wrote in a letter to clients that was published in part by the Business Insider.

"There is a near consensus that China will supplant America this decade," says Hendry. "We do not believe this."

"We are more bullish on U.S. growth than most,” Hendry says. “The momentous nature of recent advances in shale oil and gas extraction and America's acceptance of the unpleasantness of debt and labor price restructuring looks to us as if it is creating yet another historic turning point."

Others agree that the U.S. economic outlook isn't without some hope.

The United States will avoid dipping back into a recession despite cooling economic growth rates, says Goldman Sachs chief equity strategist Abby Joseph Cohen.

The economy grew 2.2 percent in the first quarter, down from 3 percent in the fourth quarter and below expectations for a gain of 2.5 percent. That doesn't mean the economy is due to contract, Cohen says.

"All you need to believe is that we will avoid another recession over the next couple of years," Cohen tells CNBC. "And that is indeed our forecast, even though we see growth has slowed somewhat."



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Tuesday, 01 May 2012 08:06 AM
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