Birinyi: "Short-Sellers Have Learned Their Lesson" S&P 500 At 1,900 By June

Tyler Durden's picture


While infamous ruler-user Laszlo Birinyi does note that "this market is not going to be like last year," he remains full bulltard as to where stocks are headed. As Bloomberg notes, Birinyi says stocks have too much momentum to make betting against them a winning strategy and the S&P will hit 1,900 by the end of the second quarter. "Short sellers have probably learned their lesson," he squeaks adding thatthe current pullback signals "healthy skepticism that sets the stage for more gains." One question - how was momentum in 1929? 1987? 1999? or 2007?



Via Bloomberg,

U.S. stocks have too much momentum to make betting against the Standard & Poor’s 500 Index a winning strategy and the gauge will probably reach 1,900 next quarter, according to money manager Laszlo Birinyi.


...It fell 5.8 percent in the three weeks staring Jan. 15, losses he said signal healthy skepticism that set the stage for more gains.


“I don’t like when the market just shrugs these things off,” Birinyi said from Westport, Connecticut. “It’s OK to just stop and take a deep breath. The market should have some sort of a negative reaction when you have problems in Turkey and Argentina. That didn’t make me uncomfortable.”




Short sellers have probably learned their lesson” after a year when 460 of 500 companies in the benchmark index climbed, the most since at least 1990, Birinyi said. At the same time, “there’s nothing that you can say is a bargain or a real value” if you’re a bull, he said.




“We’ve had a little bit of a detour and the road isn’t as smooth as it has been, but we still think the rally is intact,” Birinyi said.


The S&P 500 had fallen 5 percent or more 18 times previously since the start of the rally in March 2009, recovering the losses within about two months on average, data compiled by Bloomberg and Bespoke Investment Group show. To Birinyi, the latest retreat will be no different, though he said investors will have to shift their strategies to succeed in 2014.


This market is not going to be like last year, which was a very steady consistent market without a whole lot of volatility,” he said.

Bulls can only hope that Birinyi is correct (and it's the stock that matters)...


But it is the slowing flow that has hurt sentiment recently - and we suspect the Fed is to worried about its credibility to jump back on the un-taper bandwagon anytime soon...


Seems to us like all that matters is USDJPY holding above 102.00


h/t @Not_Jim_Cramer

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Mon, 02/10/2014 - 12:20 | 4420013 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Lazlo, you are a complete ....

Mon, 02/10/2014 - 12:48 | 4420026 Cult_of_Reason
Cult_of_Reason's picture

Didn't Lazlo said somewhat the same on 12/31/1999?


Mon, 02/10/2014 - 12:58 | 4420144 HyBrasilian
HyBrasilian's picture

Well ~ Historically ~ It's always been down to:





Mon, 02/10/2014 - 13:11 | 4420174 Divided States ...
Divided States of America's picture

Usually when some conniving deceitful Wall Street greedy bastard is right, his calls will be listened to by the sheeple. This fucker Lazlo is definitely using his previous call to draw in the sheeps to buy more all the while he offloads to them. Just listen to the guy talk, you cant understand a word he says.

Mon, 02/10/2014 - 13:21 | 4420202 pods
pods's picture

Everyone's got a plan until they get punched in the face.

-American poet Mike Tyson

Mon, 02/10/2014 - 14:35 | 4420456 HyBrasilian
HyBrasilian's picture

Punch?... [dude ~ is that like some kinda 'kool aid' or sumthin'?]... :-)

Mon, 02/10/2014 - 13:14 | 4420182 Jason T
Jason T's picture

why is this guy not homeless after this call let alone still giving stock investment at this time?

Mon, 02/10/2014 - 12:25 | 4420033 rocker
rocker's picture

The thing is that the FED has not stopped QE. Just a taper. Don't get me wrong. It will end bad. But the ending may not be here yet.

Last week Blackrock with their powerhouse of ETFs and FED money showed that POMO can work very well.

We must remember to listen for the music to stop. Meanwhile, I will only listen and observe.  

Mon, 02/10/2014 - 12:44 | 4420089 Cult_of_Reason
Cult_of_Reason's picture

Past performance is no guarantee of future results.

Just because QE "worked" in 2013, doesn't mean it will automatically "work" in 2014 (from a much higher level, higher multiple, and record peak margins).

I assume your definition of "work" is similar to Bernanke's (QE is working = higher S&P 500).

Mon, 02/10/2014 - 14:43 | 4420485 game theory
game theory's picture

$800B of asset purchases in 2014...and that's assuming the Fed does not adjust the taper.  Anyone that says the stock market is going higher is likely to be right...not because stocks are a decent place to put money or for any fundamental reason...but just because the Fed is such a big player.

Mon, 02/10/2014 - 16:25 | 4420568 Cult_of_Reason
Cult_of_Reason's picture

First, it is about $500B of QE in 2014 vs. $1,020B of QE in 2013.

Second, higher stock market prices (higher level and high multiples) require higher dollar amount of QE to inflate asset prices. (just $35B a month of QE won't be enough -- the amount of printing by this Summer).

Third, just to keep the stock market at these artificially inflated levels the Fed must keep printing and buying (without the constant flow, the stock market will plunge, as it plunged after QE-1 and QE-2).

Mon, 02/10/2014 - 17:14 | 4421106 game theory
game theory's picture

Haha...I keep using $800b since I was sure they wouldn't taper until 2015. $500b...that right. I feel less optimistic about my previous statement...but only about $300b less optimistic.  I still maintain that markets will go up.

To your second point, how do you figure it "won't be enough"? Another year of QE in *any amount* will affect asset prices. 

With regards to that last point you made..."artificially inflated levels"'s hard to argue with the two most important words there: artificial and inflated. Yes...the Fed changed everything with QE...and the US economy has been revealed to be smoke and mirrors along with a few real businesses here and there. But the US gov't has jammed so much money into the economy over the past few years with its deficit spending that has fueled a housing bubble in VA/MD/ that has enriched the defense companies and their's just so much darned money when you add it up, that I can't see stocks "plunging". But who knows...I know alot of people itching to buy stocks if markets do plunge since their money is just sitting in a bank. So many people can't possibly be maybe a plunge is coming. 

Mon, 02/10/2014 - 12:24 | 4420039 Stackers
Stackers's picture

I actually I think we drift sideways here, bump 1900 in the summer briefly, then come sept to october it falls apart.

Mon, 02/10/2014 - 13:08 | 4420167 Beam Me Up Scotty
Beam Me Up Scotty's picture

Chuckie Shumer et al. wont be happy about that with elections staring them in the face.  A collapsing market right before congressional elections?  I doubt it.

Get to work, Mr. Yellen!!

Mon, 02/10/2014 - 12:33 | 4420061 SAT 800
SAT 800's picture

"Short sellers have learned their lesson". Well, maybe not all of them; 625,000 futures contracts traded already today on the S&P; result; DOWN.

Mon, 02/10/2014 - 12:37 | 4420084 wallstreetapost...
wallstreetaposteriori's picture

I'm waiting for stock buyers to learn their lesson..... it seems that everyone wants to play "Fukashima Hot Potato" at the moment.

Mon, 02/10/2014 - 12:38 | 4420080 wallstreetapost...
wallstreetaposteriori's picture

I see he brought down his S&P expecations a bit from his 2800 forecast in 2011....  heres a link

Mon, 02/10/2014 - 12:19 | 4420017 SAT 800
SAT 800's picture

Talking his book? "The rally is intact". Not until it makes new highs; otherwise it's not a bull market; definition.

Mon, 02/10/2014 - 12:28 | 4420047 mayhem_korner
mayhem_korner's picture



Code for "Print, Janet, Print" (which btw can be sung to the tune Disco Inferno...)

Mon, 02/10/2014 - 14:36 | 4420466 B.J. Worthy
B.J. Worthy's picture

Fiscal Inferno!

Mon, 02/10/2014 - 12:21 | 4420019 willpoi
willpoi's picture

"dogs and cats living together complete hysteria"

Mon, 02/10/2014 - 14:21 | 4420396 DannoH
DannoH's picture

Excellent Ghostbusters reference.

Mon, 02/10/2014 - 12:24 | 4420023 Dr. Engali
Dr. Engali's picture

I predict the market is going to go up and then down, followed by down and then up. I'll even throw in a little sidways action to cover all my bases.

Mon, 02/10/2014 - 12:38 | 4420086 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

...and this is the only prediction that I believe.  As much as I love my fellow doom-and-gloomers out there, too many are of the perennial opinion that the market goes up or sideways in the near term, but falls off a cliff "(insert next fall or spring here,,or 1-2 years in the future)."

Mon, 02/10/2014 - 12:46 | 4420103 Dr. Engali
Dr. Engali's picture

Nobody knows what the hell is going to happen. When they finally pull the rug on this thing, only a select few will know. I have my suspicions on how things will play out, but I have no idea when. Everybody is just guessing.

Mon, 02/10/2014 - 13:25 | 4420219 halfawake
halfawake's picture

what about backwards?

Mon, 02/10/2014 - 12:25 | 4420030 The_Ungrateful_Yid
The_Ungrateful_Yid's picture

Old yeller will continue the charade...

Mon, 02/10/2014 - 12:25 | 4420035 Atomizer
Atomizer's picture

Laszlo Birinyi,

Are you counting on Mr. Janet Yellen to wall paper your financial portfolio? At the end of the day, you'll look like a limp dick.


Mon, 02/10/2014 - 12:24 | 4420038 mayhem_korner
mayhem_korner's picture



The notion of "momentum" is what usually leaves craps table enthusiasts curled up in the fetal position in some back alley.

Mon, 02/10/2014 - 12:28 | 4420051 jcaz
jcaz's picture

Yep- when you see these guys betting on momentum, it's time to hit the door running.....

Mon, 02/10/2014 - 12:29 | 4420054 Spastica Rex
Spastica Rex's picture

I guess I was under a misunderstanding that momentum required mass and velocity.

Mon, 02/10/2014 - 13:17 | 4420188 pods
pods's picture

Nah, skittles, unicorns and a whole bunch of hopium smoked through the QE pipe.


Mon, 02/10/2014 - 16:44 | 4420378 HardlyZero
HardlyZero's picture

S&Pee  looks like its Tapering off now...flat and dribbling lower.   Loss of erection structure.

Mon, 02/10/2014 - 12:25 | 4420044 NOZZLE
NOZZLE's picture

Why not, when you have a fast food stock like ChitPotle trading at 53 times earnings ($544 a fucking share) the sky is the limit.  Lets not even bring up priceline.  

Can someone even provide a coherent arguement as to why a place that sells food that you could find on a street vendor's cart for 10% of the price has a share price of $544. 

Mon, 02/10/2014 - 12:35 | 4420069 Atomizer
Atomizer's picture

It's apart of a money laundering shell game operation. But, you didn't hear this from me. Start with the Board of Directors and branch out to interconnecting companies. That's all for now.

Mon, 02/10/2014 - 12:29 | 4420055 Glass Seagull
Glass Seagull's picture







Mon, 02/10/2014 - 12:31 | 4420062 QE49er
QE49er's picture



"God himself could not sink this economy."

I'm just going to keep saying this until it all comes crashing down.

Mon, 02/10/2014 - 12:43 | 4420101 Winston Churchill
Winston Churchill's picture

"Ship" sic Capt. Smith.

Mon, 02/10/2014 - 12:34 | 4420065 SillySalesmanQu...
SillySalesmanQuestion's picture

Hmmmm.....(mental note to self), Go long rulers and momentum. 

Mon, 02/10/2014 - 12:37 | 4420072 NuYawkFrankie
NuYawkFrankie's picture

I always thought Birinyi was a resort on the Itailian Adriatic.

Mon, 02/10/2014 - 12:41 | 4420095 Winston Churchill
Winston Churchill's picture

Indian recipe I thought.

Mon, 02/10/2014 - 12:39 | 4420083 maskone909
maskone909's picture

S&P isnt finished going down imo


Mon, 02/10/2014 - 13:51 | 4420294 SAT 800
SAT 800's picture

Nor in mine.

Mon, 02/10/2014 - 12:38 | 4420090 yogibear
yogibear's picture

QEen Yellen will keep moving with money printing and buying US debt.

The Fed won't stop until forced to.

Time to raise the debt ceiling to  $20 trillion, then on to $25 trillion.... $30 trillion.....

Mon, 02/10/2014 - 12:50 | 4420119 maskone909
maskone909's picture

the entire theory of keneysian economics relies on creating money out of debt.  to not raise the debt ceiling would mean massive deflation and would contradict the purpose of the contemporary monetary system. 

this is all just a show to destract the zombies

Mon, 02/10/2014 - 12:41 | 4420097 forrestdweller
forrestdweller's picture

He is right. as long as the central banks keep printing money, the s&p will rise.

as soon as they stop, the s&p will fall.

Mon, 02/10/2014 - 12:40 | 4420099 Dr. Engali
Dr. Engali's picture

Shorts have learned her lesson..... Lol. What do you think is driving this market? The shorts keep jumping on it then fed squeezes them out.

Mon, 02/10/2014 - 12:44 | 4420106 Yen Cross
Yen Cross's picture

   Is that Birinyi or Balowney?

Mon, 02/10/2014 - 12:48 | 4420115 _ConanTheLibert...
_ConanTheLibertarian_'s picture

Desperation! He's bullrestarded

Mon, 02/10/2014 - 12:52 | 4420118 financialrealist
financialrealist's picture

Ben Bernanke, 10th January 2008 - "The Federal Reserve is currently not forecasting a recession."

The point: no one knows shit...including when this market finally collapses under its own weight....

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