BREAKINGVIEWS-Investing champs shoot for second year of glory

Sat Mar 16, 2013 1:24am IST

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(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.) (Refiles to fix formatting.)

By Antony Currie

NEW YORK, March 15 (Reuters Breakingviews) - Hitting up a roomful of the best U.S. mutual fund managers for market predictions after a couple of hours of cocktails seems to have some merit. Attendees at last year's Lipper Fund Awards ceremony did pretty well in an after-dinner survey conducted by Breakingviews. This year, the 247 industry champs and their cohorts will be hoping to follow suit.

For one, they're more optimistic about the stock market. Last year, three-fifths nearly pegged where the Dow Jones industrial average would end 2012 - around 13,000, roughly where it was when they voted. This time, a similar amount - 63 percent - is convinced the S&P 500 Index will close above 1,750, about 13 percent higher than where it is today after a 10 percent jump already this year.

Rather surprisingly, 65 percent reckon the 10-year U.S. Treasury yield will tumble back below 2 percent. That's despite growing market skepticism the Federal Reserve's policy of buying government and mortgage agency bonds is having much effect on interest rates and may also be scaled back. Given their correct call last year, though, it's hard to discount the money managers.

The gathered investors sound bearish on Apple (AAPL.O). Nearly three out of five expect Google (GOOG.O) to be worth more at the end of 2013. The market value of the iPhone maker is $147 billion bigger, so unless the internet search giant's stock can muster at least a 55 percent gain, the prognosis includes a further dip for Apple.

On a relative basis, they're also concerned about the fate of Morgan Stanley (MS.N) Chief Executive James Gorman. Almost half picked him as the bank boss most likely not to succeed. Come December, they reckon he's more apt to be out of a job than Bank of America's (BAC.N) Brian Moynihan or JPMorgan's (JPM.N) Jamie Dimon.

Corporate governance activists can take some comfort from the poll results, too. A strong 72 percent of the crowd favored companies splitting the roles of chairman and chief executive between two people. If only they could muster the same numbers on proxy votes as straw polls.

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CONTEXT NEWS

- The following are the results of a Breakingviews straw poll of 247 U.S. stock and bond mutual fund managers at the Lipper Fund Awards on March 14 in New York. Both Breakingviews and Lipper are owned by Thomson Reuters (TRI.TO)(TRI.N).

- Which company will be worth more at the end of the year?

Apple – 43 percent

Google – 57 percent

- What will 10-year Treasuries yield at the end of the year?

Above 3 percent – 35 percent

Below 2 percent – 65 percent

- Where will the S&P 500 close at the end of the year?

Below 1,450 – 37 percent

Above 1,750 – 63 percent

- Will Washington reach a long-term agreement on budgets?

Yes – 16 percent

No – 84 percent

- Who is more likely to be CEO no more by the end of December?

Bank of America's Brian Moynihan – 34 percent

Morgan Stanley's James Gorman – 48 percent

JPMorgan's Jamie Dimon – 18 percent

- Should the roles of chairman and chief executive be held by two different people?

Yes – 72 percent

No – 28 percent

- Will Angela Merkel be re-elected as Germany's chancellor?

Yes – 84 percent

No – 16 percent

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- For previous columns by the author, Reuters customers can click on [CURRIE/]

(Editing by Jeffrey Goldfarb and Martin Langfield)

((antony.currie@thomsonreuters.com)(Reuters messaging antony.currie.thomsonreuters.com@reuters.net)) Keywords: BREAKINGVIEWS FUNDS/SURVEY

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