Jeffrey Saut: This year will be about breakthroughs, not disasters

The following is an excerpt from the commentary of Jeffrey Saut, Chief Investment Strategist and Managing Director of Equity Research at Raymond James & Associates, for Monday January 30. To read the full commentary, click here.

The call for this week: Well, I am traveling the balance of this week to see institutional accounts, speak at an Investment Banking Conference, and present at a handful of retail seminars. Consequently, there will be no verbal strategy comments for the rest of the week. Therefore, I will leave you with these thoughts.

The January Barometer has sounded the “all clear” signal with a monthly gain for the INDU of 3.36% and a 4.67% rise in the SPX. History suggests double-digit returns for the rest of the year with positive returns occurring more than 80% of the time.

Two sectors have been the main drivers of this January Jump, namely Consumer Discretionary and Technology. Unsurprisingly, the Consumer Discretionary, Technology, Industrial, and the Materials sectors are all beating earnings estimates at the highest “beat rate,” while Consumer Staples, Energy, Financials, and Healthcare are not.

While I remain somewhat timid on a short-term trading basis, I continue to believe the year of the Water Dragon will bestow the five Chinese blessings of harmony, virtue, riches, fulfillment, and longevity. That adds even more weight to my growing belief that 2012 will be about breakthroughs, not disasters.

P.S. – As an aside, maybe participants should consider that Warren Buffett is not paying too little a percent of income tax, but rather his secretary is paying too high a percent!