As we look ahead to how 2011 will play out, the bears and bulls are busily voicing their opinions. But it seems that passive investors not only have the lowest expenses, they also have the best metaphors -- or maybe it's just Jack Bogle.
With his latest book, Don't Count on It, hot off the presses, Bogle has been supplying the media with some top-quality sound-bites.
Urging us not to interfere too much, he contends that over the long haul, "investments perform better than investors." Could there possibly be a more concise description of the rationale behind passive investing?
"Stock-picking pros aren't stupid," he argues, "they're just expensive."
Regarding the turmoil in the market in recent years, Bogle predictably takes a long-term view:
Well, of course after the previous 20 years, the last 30 years look pretty normal. You know, it's all cycles back and forth. Emotion drove the market way upward in the first two decades, '80s and '90s, and then both fundamentals and the emotional side slowed down.
Even with his years of experience, he believes "this is the most difficult time to invest in my career."
His friend Burton Malkiel also sees problems ahead. When asked whether the U.S. administration is willing to make the tough decisions yet, Malkiel replied, "We're not even willing to talk about them."
From passive to active
Mark Mobius has similar concerns: "The general attitude of governments toward debt is a big problem that is going to get us into trouble on a global scale."
Despite his recent retirement, value guru David Dreman is still keeping a close eye on the economy:
Whether we are in a recession or depression all depends upon terminology and the terminology has changed. They used to call similar economic conditions a depression. But that's a d-word and we don't use the d-word now. If we are comparing what happened in previous depressions, like the ones in the 1870s, or in 1907 or the Great Depression, yes, we were in a depression.
He's not shy in his criticism of Fed Chairman Ben Bernanke, who he says "has an almost flawless record of poor forecasts and policy decisions since his tenure began in 2006."
Ken Fisher has a more optimistic outlook: "This should be a relatively easy year for stock pickers. There is an abundance of cheap stocks relative to interest rates, especially if you look beyond [U.S.] borders."
Among the stocks he likes are TIM Brasil, Brazil's third-largest mobile phone operator; Tim Hortons, Canada's largest fast-food chain; and Chilean-based Enersis, Latin America's biggest private electrical power generator.
Looking to the market as a whole, Fisher expects 2011 to be "very frustrating" for both bullish and bearish investors. "This is an up-a-little year and down-a-little year -- more likely up a little, but not too much," Fisher told CNBC. "I think the bull market continues, but that will be 2012 ... [2011] is going to be a quiet year."
... Obligatory Hugh Hendry section
Turning finally to the man who describes himself as "the least correlated asset in the world," U.K. hedge fund boss Hugh Hendry sees parallels between the scapegoating of hedge funds and the increasing hostility to minorities such as gypsies in France:
Social mood is hardening, changing, deteriorating: We see that [even] in the very polite, previously libertarian societies. ... Hedge funds are a minority. Guess who else is a minority? People from overseas.
Referring to his bearish position on Japan, he says:
I see Japan as a nuclear bomb strapped onto the chest of the global economy. They've got uranium -- which is, they sell credit protection: CDSes. I'm the other side of that.
As Liam Halligan, chief economist at Prosperity Capital Management, said, "Hugh is very smart and is always worth listening to -- even when he turns out to be wrong."
More from Fool UK's Padraig O'Hannelly:
This article was adapted from our sister site across the pond, Fool UK. Padraig doesn't own shares of any stocks mentioned. Tim Hortons is a Global Gains pick. The Motley Fool has a disclosure policy.
