Jonathan Golub, U.S. equities strategist with UBS, sat with AdvisorOne on at IMCA's annual conference in National Harbor, Md., on Tuesday for a frank discussion of the market outlook, earnings season and investing cliches. He certainly knows of what he speaks, having gone through it before as chief investment strategist and senior managing director for Bear Stearns. Before that he was U.S. equity strategist for J.P. Morgan Funds.
"I like stocks now," Golub said. "You have your traditional bull and bear advocates, but I'm pragmatic. Yes, the economy is growing slowly, but it's not bad."
Apple (AAPL), he said, reported a "ripping beat" (meaning it beat analysts' estimates). Companies on the whole are beating estimates by 6% or 7%, which is, he says, huge.
"They are better at managing profits now that at any other time that I've seen in my career," Golub said. "The market will never be perfect and you always start with the assumption that something is broken; the question is will there be an overreaction or underreaction."
He admitted the situation in Europe is concerning, especially now with the election in France. It seemed for a while that France and Germany were on the same page, but now France looks to be rejecting austerity measures.
"Also, you have the issues with the Spanish bond market. We'll be dealing with this for years. It will initially cause a spike in concern, but then policymakers will take action to help it in the short term. The consequences of not acting are just too great. But when it comes to the long term, that's another matter."
