CNBC contributor, CEO of Ritholtz Wealth Management and author of the new book “How I Invest My Money” — joined Benzinga’s PreMarket Prep show Friday.
Brown discussed his outlook for stocks in the coming months and potential economic recovery plays in anticipation of coronavirus vaccines hitting the market.
Brown’s Economic Recovery Plays: Brown said he is bullish on stock prices between now and year’s end, predicting a melt-up in the S&P 500 in coming weeks.
“I hate saying it out loud because if it doesn’t happen … you know. But I’m starting to think that way,” he said.
Brown owns reopening stocks like Starbucks Corporation (NASDAQ: SBUX) and Simon Property Group Inc (NYSE: SPG).
“I’m in some companies that really need there to be a reopening to get back to their 2019 numbers, and it might take them two years to do it,” Brown said.
For now, Brown said he’s positioning in anticipation of how people will feel when they start hearing about friends and family members getting the coronavirus vaccine in coming months.
Gap Growth Story: Brown is bullish on another economic recovery stock, Gap Inc (NYSE: GPS).
“Years and years and years and years with no progress, no momentum. Nothing good to talk about in the story. You’ve got this fundamental change now — them getting better at omnichannel, them getting better at the app, them improving the quality of the clothing and taking on Lululemon,” he said.
“This could become a growth stock and it’s selling at 0.5x sales, so you don’t even have to pay up for the privilege of making that bet.”
‘Taking An L’ On Slack: Like any investor, Brown’s track record is far from perfect. He acknowledge taking a loss on Slack Technologies Inc (NYSE: WORK) earlier this year.
“I think one of the things I didn’t count on was how much pressure Microsoft was going to be putting on Slack, almost as though they timed that pressure for the company’s IPO,” Brown said.
Slack’s choice to go public via a direct listing meant that, unlike companies that list traditionally, Slack was immediately exposed to insider selling pressure — and did not have the support of big bank IPO underwriters like Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS), he said.
“I didn’t count on those two things, and it escaped me how important they might be.”
