Jeffrey Vinik, who announced the resurrection of his hedge fund on Thursday, believes that the current bull market could run for another decade.
“My belief is that we’re in a secular bull market,” Vinik said on “Squawk Box” Thursday morning. “In retrospect — I didn’t know it at the time — it started in 2009 and if I had to guess, we’re halfway through it, driven by good economic growth and low inflation.”
Vinik’s upbeat prediction comes despite recent concerns that one of the longest bull markets in history may finally be winding down amid expectations for cooler GDP growth and higher borrowing costs. Though the S&P 500 is up nearly 10 percent from its recent December lows, many market participants have wondered about the longevity of employment gains and continued market success.
“We will have cyclical bear markets in between: I don’t know what’s going to happen in the next six months. But long-term, I’m very optimistic,” Vinik added.
The investor said the fourth-quarter plunge in the stock market was just a correction, just as a pullback beginning in 2015 was as well.
Vinik rose to investing fame while running Fidelity’s Magellan Fund before opening his own fund, Vinik Asset Management, in the 1990s. Over a 17-year run spanning the mid-1990s to 2013, Vinik’s fund returned 17 percent annually, according to the Wall Street Journal.
The longtime money manager said earlier Thursday that he is reviving his fund with “plenty of opportunities” drawing the investor back into the business of fundamental analysis and long/short stock picking. That model may appear antiquated to some new to Wall Street as capital flows into low-fee index funds and more and more trading is dictated by computer algorithms.
While he declined to comment on specific investments, Vinik added that “technology is in the middle of a 20-year run, just like the market is” and that construction materials “look interesting.”
Vinik said he wants to get back to “good old-fashioned stock picking.”