Two of Fidelity’s top fund managers subscribe to this theory.
One is Adrian Brass the manager of Fidelity American Special Situations fund. He is optimistic the rally will continue in the short term. He points out that corporate America has taken a bigger “knife to costs” than at any time in its history.
But longer term he is less bullish, gradually rotating his portfolio into stocks in sectors such as healthcare and IT services that can grow even as consumers and governments retrench, and out of cyclical stocks.
His colleague Anthony Bolton has said that the cyclical recovery would “run out of steam” in the first half of this year as investors came to terms with the subdued economic reality. This is the guy who is relocating to China because he is a China bull.