Fisher - MEGA Caps for 18+ Months

Over the past couple of years I've found the market advice of Ken Fisher (founder, CEO and CIO of Fisher Investments) to be incredibly interesting + insightful. I listen and pay special attention to the opinion of Fisher because so much of his perspective stems from his firm's thorough and rigorous analysis of historical market data and events. As a result, I'm directly quoting his take below on the current state of the market courtesy a 5/24/08 Bloomberg television interview:

*The Bull Market's Last Leg...Largest Stocks to REIGN:
"What I believe we have is a classic last leg of a bull market ahead that might be 18 months or it might be 3 years...no way to know at this point, too many variables that'll come at us in the future. But normally bull markets have a last leg that are led by HUGE stocks...we haven't really had that. Last year we started getting a little bit of that but then the correction started. In this environment you normally see something like a 1/3 of the total length of the market led by larger stocks at the end..and literally from the beginning of this bull market in 2002-2003 we've had small cap leadership. The small cap leadership has faded away and now I think when we look out the next couple of years we're gonna see this larger cap effect. The larger cap effect is sneaky because people can't quite see why these big obvious companies should do well. And the fundamental feature of why they should do well is very simply that we stop lending to lower quality companies but we've increased our propensity to lend to the highest quality companies and high corporate credit ratings are directly proportional to corporate size. It's just a simple J-curve so that when you get up into that (corporate bond) 'A' rated and above, you're talking about the very largest stocks."

*CORRECTION...NOT Recession...Witness 1998:
"If this were a recessionary environment (then) transportation industry capacity utilization wouldn't be flat out because one of the first things that happens in a real recession is that the stuff we ship on trains and trucks (and rails, ships, etc.) goes to the floor...We had a correction back in 1998...What the media is saying now sounds an awful lot like 1998 if you flip Asia for America, U.S. stocks for foreign stocks and emerging markets for technology...otherwise it looks the same."

*Ken Fisher's Bio:
http://en.wikipedia.org/wiki/Kenneth_L._Fisher

Data Courtesy: Bloomberg