James Stack's Forecasts Have Been on the Money - See His New Recommendations

Investech Newsletter Publisher, James Stack who is a long running Market Monitor guest on PBS, Nightly Business Report has called the bull market perfectly so far. Back in March he said, “the building blocks were in place for a new bull market.” The market made a bottom on Mar. 9. In an Aug. appearance he said, “The bull would continue to strengthen.”

He seems moderately bullish. Taking a cue from market contrarians he said, “This is one of the most unloved bull markets. There is still a lot of fear and skepticism keeping investors on the sidelines.”

What is his new forecast? He sees very little historical risk and is 97% invested. “The only double dip recession we’ve seen in the last 70 years was 1980-1981, and it took a spike in interest rates to trigger that one double dip. I don’t think we’re going into recession in 2010,” he said.

Stack sees very slow growth in 2010. The danger signs that would cause him to be bearish are: If the dollar were to plummet to last years lows Stack thinks that would trigger the Fed to raise interest rates. Technical divergences in the new highs list, and if leadership and breadth lag, are also danger signs.

Stack thinks gold is frothy and if the dollar stabilizes gold will come back down below $1000.00. His new stock picks are defensive plays: They include food co. Sysco, (SYY). Stack likes orthopedic manufacturer Stryker, (SYK). He says the shares have the lowest price to cash flow they've had in 20 years, and they have 3 billion in cash and no debt. Stack also likes retailer TJX, (TJX). He thinks TJX will return to their 20% annual growth in 2010.

Adding credibility to Stack's picks is his claim that his managed accounts are back up to their 2007 highs. Stack is invested in all three stock picks.