There are "hundreds of attractive companies" in the market today, according to Elizabeth R. Bramwell, portfolio manager of the $70 million Bramwell Growth Fund and president and chief investment officer of Bramwell Capital Management.
"Second-quarter profit momentum was not necessarily the peak.....The bottom in the economy was the second quarter. The third quarter will be good; the fourth quarter will be better still."
She expects the economy to grow 2% to 3% in the first half of 1996 with little inflation.
The three-percentage-point spread between the federal funds rate (at 5.75%) and inflation (at 2.75%) is high by historical standards, she said.
"The Fed could lower rates to get closer to the historical norm -a spread of 175 basis points - which should be positive for equities."
Her portfolios include such large companies as Intel Corp. and Texas Instruments Inc. as well as companies with market caps of less than $100 million, although the median market cap is $1.5 billion. Smaller holdings include: Thermo-Electron Corp., which makes 20 different products from laser hair removers to heart assist devices for those awaiting transplants, and X-Rite Inc., which makes a hand-held device that measures and digitizes color.
"Up till now technology multiples have been catching up to the market. There's fairly good reason to expect 20% growth to the year 2000," in such technology sectors as semiconductors. "That's not too shabby."
The growth also will be spurred by global demand in India, Japan and Germany for personal computers.
Non-technology larger cap holdings include Illinois Tool Works Inc., Johnson & Johnson and CPC International Inc.