Jeff Saut Says to Selectively Upgrade the Stocks in Your Portfolio ~ market folly

Tuesday, May 11, 2010

Jeff Saut Says to Selectively Upgrade the Stocks in Your Portfolio

Jeff Saut, Chief Investment Strategist at Raymond James, is out with his latest market commentary where he comically deems last week's flash crash a "pornographic-plunge." Saut has long been cautious on this market, awaiting an anticipated pullback and his latest missive outlines how we finally got that correction he was looking for. Last time around, Saut outlined some of his latest investment recommendations and the writing was on the wall so to speak as he pointed out various contrarian signals in his sell in May and go away piece. Needless to say, he was patting himself on the back this time around for his nice cautious call to raise cash and hedge portfolios before the flash crash hit.

That said, Saut did advise investors to sell those hedges into the twilight last week as the market headed viciously lower as he believes that would be the low end of the correction. He doesn't think equity markets will spring right back up, but rather will take some time to digest the move before "resuming an upward march." This is a decidedly different stance that global macro hedge fund player Louis Bacon. In his latest Moore Capital investor letter, Bacon ponders a possible return to a bear market by year-end.

Saut, however, makes special note that his proprietary indicator still remains oversold and that the market simply experienced a correction. Also, he says it's time to buy some stocks, writing, "(I'd) advise using some of the cash raised over the past six weeks for selectively upgrading the stocks in your portfolio. One such name for your consideration is 7% yielding Enterprise Products Partners (EPD/$32.75/Strong Buy). Conveniently, we added this name to the Focus List last Friday."

Embedded below is the latest weekly investment strategy from Raymond James' Jeff Saut:

You can download a .pdf here.

Lastly, regarding the US dollar, Saut outlines how the greenback could be entering new bull market territory. Still though, he likes commodities and "stuff stocks" for the long-term despite possible future dollar strength which is interesting and something to keep an eye on.

Saut ends his note with a brief quote that, "Crisis = Danger + Opportunity." Regardless of whether or not you're in the bull or bear camp, it's advisable to keep an eye on a key level in the stock market. The market will ultimately decide for you if it rallies through that level or fails at it. For more insight from market strategist Jeff Saut, you can see some of his latest investment recommendations.

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