Blackstone’s Wien: 30% of 2% Declines Since 1962 Led to a 10% Correction and a Buying Opportunity

“The biggest retreat in the Standard & Poor’s 500 Index since August is creating a buying opportunity for investors willing to withstand declines that may reach 10 percent, according to Blackstone Group LP’s Byron Wien.

The benchmark gauge of U.S. stocks tumbled 2.3 percent to 1,314.55 yesterday after manufacturing expanded at the slowest pace in more than a year and employers hired fewer workers than forecast. The decrease was the 126th decline of 2 percent or more during bull markets since 1962, according to Kevin Pleines, an analyst at Birinyi Associates Inc. in Westport, Connecticut. Of those, 30 percent occurred within a month of the start of a so-called correction, or 10 percent drop, he said.

More than $578 billion has been erased from American equity markets since the S&P 500 peaked at 1,363.61 on April 29, pushing the index’s valuation to 13.3 times estimated profit for 2011 from 13.8 times. Wien, who estimates earnings for companies in the gauge will climb about 12 percent in 2011, says shares will prove a bargain and the index will rally.

“Investors should be looking for buying opportunities,” said Wien, the vice chairman of Blackstone Advisory Partners, whose parent, New York-based Blackstone Group LP, is the world’s largest private-equity firm. “The economy is not as bad as it looks right now. Corporate profits will be good, very good. People are asking me, ‘Do you still think the market can get to 1,500 by the end of the year?’ I do.””

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