In fall 2011, global stock markets tumbled amid increasing concerns over sovereign debt levels. Debt crises gripped Greece, Ireland, Portugal, and Spain. S&P even stripped the U.S. of its pristine AAA sovereign credit rating.
The S&P 500 fell 19% from its July 7 closing high of 1,353 to its Oct. 3 closing low of 1,099.
It was the kind of move you’d think would have Wall Street strategists tripping over each other as they cut their targets for the market.
But on Sept. 11, when the S&P was at 1,154, then-BofA strategist David Bianco raised his 12-month forecast on the S&P to 1,450 from 1,400. This implied a very bullish 26% return. In his note, he also suggested the market could surge 15% from Sept. to January.
At the time, his calls were widely criticized as delusional optimism. I even wrote that he was the “gutsiest strategist in the world right now.” (Three days later, BofA and Bianco parted ways. He later joined Deutsche Bank as their top equity strategist. Today, he’s CIO at DWS.)
Well, Bianco nailed both calls.
The S&P surged 15% from September to the end of January. And it hit 1,450 on Sept. 13, 2012 — 12 months and two days after he set his 12-month target.
This post was originally published here
