LONDON, ENGLAND, UK (JANUARY 03, 2012) (REUTERS) -
"(QUESTION: Good morning to you, Patrick. Has the surge played out now?)
The surge is going to play out through the rest of the year but we've got a lot of our total returns in for the year. We think you're going to get about 10% to 12% for the year and we've already got 2% or 3% in the bag yesterday.
(QUESTION: So you're selling the rally, buying the dips for the year?)
That's the way if you want to eke out more than 10% returns. I think there's going to be lots of potential where there's a lot of panic in markets, equity markets selloff and those are going to represent very good buying opportunities. Buy and hold, you'll get your 10% but if you're selling into the exuberance and buying on the dips, you can get a 20% return in this kind of markets.
(QUESTION: What's your S&P target?)
I think it'll get just over 1,500 for year-end on the S&P.
(QUESTION: Okay. And how much upside has the Dow gone?)
The Dow also very similar. They're very highly correlated.
(QUESTION: All right. Now, you're selling defensives. I know that you're buying the cyclicals, this is the global growth story. What's global growth going to be? What's US growth going to be? What's European growth going to be?)
Global growth is actually going to be right around 3.5% which is bang on in line with what it's done for the last 20 years. So if you live in a western country, you're probably feeling that we're stuck in a recession or stagnation at best but globally, there is growth; 80% of that 3.5% is coming from Asia and emerging markets, however, but globally you got to find the companies that are selling into markets where there is growth.
(QUESTION: Are you short the Dollar?)
We're short the Dollar but not on negative view versus the other major currencies for the Dollar but the Dollar is going to have trillions of Dollars printed over the next few years through quantitative easing and unconventional measures and we prefer emerging market currencies- Mexican Peso, we've got a reasonable position in Singapore Dollar. Those are going to be beneficiaries of the quantitative easing that's going to continue this year.
(QUESTION: And what about gold? Are you buying the dips in gold?)
Gold, we're buying the dips and yeah, we're going to just hold that probably for this year. Because of the lack of growth in the United States, no growth at all in Europe, there will be more and more unconventional measures from central banks. That's going to be very bullish for gold. You have no opportunity cost in holding gold because there's no interest rates on the other safe haven assets. We think 2013 marks the beginning of a seven-year bear market for bonds; 2013, you're going to lose money by buying government bonds.
(QUESTION: And target for gold, just to finish up with?)
It will hit $2000 this year."