Neil Hennesey: 10-Year Bull Market Has Begun

and Dow will double, for sure.

Looking at this headline at Yahoo Finance, I thought to myself: OK, this is as most diametrically opposed to my fundamental outlook as can be, SO I'D BETTER WATCH THE VIDEO.

The interviewer looks just as incredulous as anyone who's gone through the market since September 2008. The interviewee is Neil Hennesey, Chief Investment Officer of long-only Hennesey Funds.

Let's examine his thesis. He says there is nowhere else for the money (he cites "the sideline money" of $9.5 TRILLION) go to. Investors got burned by leveraged investments, and yields on long-term Treasury notes and bonds are low (3% for 10-year note, 4% for 30-year bond). Companies are slashing employment, increasing productivity, and will have a better bottom line.

So, his call is partly based on improved bottom line due to cost cutting, and mostly on the assumption that there is nowhere else for the investors to go but the stock market to get a decent return.

(How about gold?)

For the first day of October 2009 (and in a 10-year bull market according to Mr. Hennesey), Dow is down 172 points (1.75%) to 9540 at 1:25 PM EST. Auspicious start. (But then, September started with 181-point dump on Dow. What do I know at this point?)

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