Rogers: Let Greece Fail

Commodities guru Jim Rogers says that Europe should let Greece default on its debt, and that the U.S. Federal Reserve needs to stop printing money, or else risk creating another serious financial crisis. Rogers tells Bloomberg that history shows the longer one delays dealing with a debt crisis, the more trouble it creates. He opposes further Greece bailouts, saying they are really bailouts of banks from France, Germany, and other countries that made bad loans in Greece — and he says other European taxpayers shouldn’t have to bail out those banks. Rogers also has harsh words for the Fed, saying […]

The Danger of The Greece/Lehman Comparisons

While many are worrying that a Greece debt default will rock the stock market and financial world the way the Lehman Brothers collapse did  in 2008, Mark Hulbert says there are several examples of sovereign debt crises that didn’t lead to long-term market woes or deep global crises. “Prior to Greece’s recent difficulties, there have been at least four other occasions over the last two decades in which a potential sovereign default sent shockwaves throughout the markets,” Hulbert writes for MarketWatch. “The stock market, on average, rose over the two years following those previous crises.” Hulbert points to the Mexican […]

Nygren, Herro Get Contrarian

While the rest of the investment world seems to be shunning Japanese stocks and large-cap stocks, two top fund managers — Oakmark’s David Herro and Bill Nygren — say that’s where they are finding value. “We’re fully confident that our Japanese stocks will become a positive at some point for the fund — who knows when,” Herro told the Associated Press in reference to a fund he and Nygren co-manage. “Japan is the cheapest among the developed markets. Dividend payments are rising in Japan, and corporate performance has improved. Foreigners don’t care. Japan is kind of depressed. The yen is […]

Arnott: Look to Alternative Investments to Battle Inflation

Saying that a “3-D Hurricane” — debt, deficits, and demographics — is lingering on the horizon for the U.S., Rob Arnott is taking several steps to prepare his portfolio for an inflationary climate. Arnott tells that the U.S. budget deficit is worse than many think, if you include entitlement program costs like Medicare, Medicaid, and Social Security. And with an aging population that will mean a shrinking workforce, he says he sees slower growth ahead — and the distinct possibility that the government will try to inflate its way out of debt. “If we turn to the printing press […]

Siegel: Market Still Cheap — Very Cheap

Wharton Professor and author Jeremy Siegel says stocks are more attractively priced than they’ve ever been during ultra-low interest rate periods, and says investors looking for yield should turn to high-dividend-paying stocks. Price-to-earnings ratios around the world are reasonable and the quality of earnings is extraordinarily high, Siegel said at a Canadian Imperial Bank of Commerce event, according to Canada’s Financial Post. During low-interest-rate periods, the average P/E ratio has been 19% to 47% above current levels, Siegel contends. Siegel also said that gold and commodities investors may be disappointed five years from now; he expects mining stocks to do […]

Akre: Focus on Pricing Power

Top value fund manager Chuck Akre says that amid an uncertain economic environment and with inflation looming as a possible issue, companies with pricing power are attractive investments. “At the end of the day it turned out that the best investments to own in the ’70s [when inflation at times raged] were businesses that have pricing power,” Akre tells the Associated Press. “And they’re probably the best things to own now. That’s the single best hedge against the unknown or high inflation or any of those issues.” Akre, who’s been lagging the market in the short term but has a […]

The Zweig Approach: Growth Investing, With a Conservative Streak

Every other issue of The Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the Martin Zweig-inspired strategy, which has averaged 9.5% annualized returns since its inception nearly eight years ago, over a period in which the S&P 500 has returned 3.0% per year. Below is an excerpt from the newsletter, along with several top-scoring stock ideas from the Zweig-based investment strategy. Taken from the June 24, 2011 issue of The Validea Hot List Guru Spotlight: Martin Zweig Generally, my Guru Strategies have a distinct value bias. The majority of these […]

Fisher: Stocks Less Risky Than Bonds Over Long Haul

Ken Fisher says that, over the long term, stocks are a safer bet than bonds — if you have a time horizon of three years or longer. “If we think of next month, the likelihood is stocks are riskier than bonds are. If we think of 10 years, stocks are almost always less risky than bonds — lower volatility,” Fisher tells Bloomberg. Fisher also says sentiment conditions are leading him toward U.S. equities and away from emerging markets in the short term. And he talks about why he doesn’t like the Dow Jones Industrial Average as a stock index, why […]

Bolton Remains Confident in China

While his China-focused fund has struggled in its first year, top U.K. fund manager Anthony Bolton says he’s sticking to his general approach — with some modifications — and continues to think Chinese stocks are packed with potential. “I am pretty confident in the general approach,” Bolton tells The Telegraph. “I said before the fund was launched that I think the drivers of Chinese growth are changing and the areas of future growth will be different from those of the past. I’ve tried to focus on those areas which are domestic consumption and services orientated. I feel even more strongly […]

Graham’s Strategy Still Producing Excellent Returns

In his latest “Number Cruncher” column for Canada’s Globe and Mail, John Heinzl takes a look at Validea’s Benjamin Graham-inspired stock-picking model, which has continued to produce stellar results some 60-plus years after Graham detailed it in his classic book, The Intelligent Investor. “Graham used a conservative, risk-averse approach that focused as much on preserving capital as it did on producing big gains,” Heinzl writes, quoting “Trendy, hot stocks didn’t garner his attention; he was concerned with companies’ balance sheets and their fundamentals.” Heinzl notes that the concept of ‘margin of safety’ was central to Graham’s approach. ”His goal […]

Icahn Worried, But Finding Opportunities

Hedge fund guru Carl Icahn sees serious threats to the equity market on the horizon, namely inflation and the eventual end of the Federal Reserve’s lax monetary policy. “Our country has been enjoying cheap commodities and finished products from Asia but as the middle class continues to grow in Asia, there will be competition for cheap goods and the bargain basement prices the U.S. consumer has enjoyed will end,” Icahn tells Fortune. “Inflation will follow, forcing interest rates higher, which will decrease earnings.” Icahn also says artificially low interest rates “helps earnings and the market because it lowers debt-service costs […]

Doll: We’re Early in the Expansion

Blackrock Chief Equity Strategist Bob Doll says recent weak economic reports indicate the U.S. is in a slowdown, but he thinks it’s temporary, and that things will improve in the second half of the year. Doll tells WealthTrack’s Consuelo Mack that we’re in a cyclical bull market, and the early stages of the economic expansion. It would be very unusual to have already seen the highs in the equity market at this point, he says, adding that stocks appear cheap right now. He says he’d be overweight in equities. David Darst, chief investment strategist at Morgan Stanley Smith Barney, also […]

Oberweis Sees Strong Tech Stock Wave

Newsletter guru Jim Oberweis says he’s finding a lot of attractive tech stocks in the market right now. Oberweis tells Forbes that tech stocks — which he says were selling at “absurdly low” valuations in 2008 — have appreciated over the past few years, but only in amounts that are in line with earnings gains. He thinks many should benefit from pent-up demand for capital upgrades among corporations, and he also thinks tech firms are putting a lot of money into important innovation and development. He says there is a “wave of technology stocks” that have been increasing earnings, widening […]