ANCHOR (OFF-CAMERA) ENGLISH SAYING:

What do you make of stocks here as we start 2013? Obviously a pretty strong note the first couple of days of the trading year, are the markets set up to continue a rally?

KEN FISHER, CEO, FISHER INVESTMENTS, (ENGLISH) SAYING:

Well, A, first, I've never had a view in my life of where stocks were going in the very short-term ever but fundamentally, we're in a bull market and a really important thing for people to do is to keep it pretty simple in that one of the most important adages that I think particularly applies right now is John Templeton's famous line that, 'Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.' And we really haven't gotten into a serious optimism phase at all which means we still have a fair amount of life in the bull market. All of 2012 was a period of churning through what I call cud chewing which is going over the same old things people are skeptical about over and over in slightly different ways and that's a great process for leading into the more optimistic period, that's the latter part of a bull market. With that comes some particular portfolio strategy adages and concepts but I think it's important for people to see that this is a bull market. Within that, you get volatility which is why you can't figure out what the short term does, but it's a bull market.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

So, what are some of the strategies that investors should be thinking about then that perhaps, you know, they haven't thought about and they might miss the boat if they don't?

KEN FISHER, CEO, FISHER INVESTMENTS, (ENGLISH) SAYING:

The easiest and best thing for people to do, who want to do something other than be passive which is actually a perfectly fine thing to do, is to remember something that most people don't know, which is that as you move through the back half of bull markets in time, on a relative basis, the very, very largest stocks - and by very largest, I mean the ones with what's technically referred to as a Dollar-weighted average market cap bigger than that of the broad market which stay on a global basis as $80 billion per market cap per stock - those stocks do better and better and better and better and better and better as the world moves into and through the optimism phase and maybe even eventually into the euphoria phase. And so therefore, what you really want to do is keep it simple. You focus on the very, very largest stocks and the mistake most people make is that you're thinking that late in the bull market, small stocks do best, which they don't; or thinking that big stocks are ones with market caps of $20 billion, $30 billion, $40 billion, $50 billion which are actually feel big to us but they're a little bit smaller than the way the market actually works. The problem is there's only about 70, 80 stocks ever that are bigger than the Dollar-weighted average cap of the market and they're so big they pull the average up. But that's really for fundamental reasons where you want to be focused and where this bull market will go in the next couple of years.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

So what are some of those stocks then?

KEN FISHER, CEO, FISHER INVESTMENTS, (ENGLISH) SAYING:

Well, before we do that which I'm delighted to do, I think you want to think of why and I think you also want to think of what that implies. The why is simply because as the skeptics give up, they buy things on the margin that they're comfortable with and kind of feel like they understand, they don't go from being skeptical and not owning equities into tiny little risky things they never heard of, they buy big comfortable names. So they're quality and big and that's what drives it, so you want to keep it simple on their names like Johnson & Johnson, the world's most diversified and very high quality healthcare provider because healthcare usually does great late in the bull market. And you want to have things like, you want to be global for sure so you might want China Telecom as the dominant phone company in China and all the growth attributes that go with that. BASF in Germany as the world's leading chemical company. When I did this in the late '90s, when it actually worked just perfectly, at that point in time, DuPont was the world's leading chemical company, the biggest and the most dominant in specialty. Today, that role is BASF; DuPont's actually since then not done so well and lost market share but it's these kinds of names. Another real simple one to see in a time like this is Home Depot which is again of that mega cap size, dominates its niche, housing is improving, people are still skeptical but everybody knows Home Depot and as the skeptic capitulates and gives up, the money flows in easily.