The chairman, CIO and, still, portfolio manager of Hennessy Funds remains bullish about the stock market and the economy not just in the United States, but in Japan as well.
"Last year," Neil Hennessy said in New York on Dec. 3, "I spoke about the lack of leadership in the executive branch of government and said the industry needs clarity from the government on health care, taxes and regulation." That lack of clarity still exists today, Hennessy said (before the Federal Open Market Committee announced its much-anticipated rate hike decision on Dec.16), which means "we'll be stuck with 2% growth."
He characterized the U.S. stock market as experiencing a full year of a sideways correction, noting that since Dec. 31, 2014, "we've moved 27,763 points through all this volatility," but the Dow Jones industrial average is "ending up where it started," down just 89 points through the end of November. In the 224 trading days up to Dec. 3 when he spoke, there were 115 negative days for the Dow.
Howe-to-earnings and price-to-sales ratios are "reasonable," and that each American consumer is saving "$700 per year" due to the sharp decline in oil and gasoline prices.
Hennessy Funds gets 85% of its sales from advisors, Hennessy said.
He argued that we shouldn't "count out corporate America yet," noting that corporate profits are high, and while there's "lots of cash still on the sidelines," that cash is getting "ready to move."
