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Another Bear Roars

Posted by: Lauren Young on October 14, 2008

Update: An earlier version of this post said Wallis was buying stocks in his personal account. Wallis says he was adding to some existing positions in the mutual fund he manages.

To say that Chris D. Wallis, manager of the Vaughan Nelson Small Cap Value Fund, is bearish is an understatement. Thanks to the credit crunch, he thinks the U.S. will be stuck in a secular bear market for years to come. Housing prices must stabilize, the debt markets need to thaw, and most importantly, “this crisis won’t end until we know who owns what,” Wallis said at a media event for reporters today organized by Natixis Global Asset Management.

And if that isn’t enough to push you into your cave, Wallis sees a 10% decline in real consumer spending.

“I know I sound really, really bearish, but when we are finished, we will have a completely recapitalized financial system,” Wallis says.

Although there are companies on his watch list, he still can’t bring himself to buy them for his fund yet.

But even bears have their bullish moments: Wallis says he couldn’t resist the urge to add to positions in some stocks at bargain prices last week.

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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