Tech Sector Standouts — Without the ‘A-Word’

In his latest article for Canada’s Globe and Mail, Validea CEO John Reese looks at some top picks in the tech sector — with one very notable and intentional omission. “Today I will attempt a feat that few in the investment world have dared in recent years,” Reese writes. “I will try to write a column about technology stocks without using the A-word – that is, without analyzing a certain headline-grabbing, California-based ‘iGiant’ that rules over the tech landscape.” Reese says that A-company is a “fine firm”. But, he adds, “my goal is to show that the tech sector is […]

Herro: Don’t Fear All European Banks

Top fund manager David Herro says the European debt crisis doesn’t mean investors should avoid European financials. In fact, he says the fear surrounding the crisis has created several bargains among those firms. “We are not believers that the European banking system is trashed for generations,” Herro tells Bloomberg. He says the system does of course face problems, but that several banks have solid businesses and very cheap shares. Herro also talks about some of the banks he’s high on, and explains how he identifies high-quality financials.

Doll Thinks Euro Debt Crisis Will Be Contained

Blackrock’s Bob Doll says he continues to believe the European debt crisis will be contained, and says the stock market’s recent troubles have made for some good buying opportunities. “There remains a high degree of near-term risk and the possibility of short-term turmoil given the evolving crisis in Europe, fiscal issues in the United States and the uncertainty over China’s growth slowdown, but our view continues to be that global economic growth will remain acceptable with conditions gradually improving in the second half of the year,” Doll writes in his latest commentary on Blackrock’s site. “Leading global economic indicators are […]

Mobius Turns to Africa

Templeton Asset Management’s Mark Mobius is finding a good deal of value in a place not known for great investments: Africa. Mobius tells Investors Chronicle that he’s high on telecoms, natural resources and consumer products in Africa, and is particularly bullish on banking stocks. “Banking in Africa is growing at a torrential pace and provides an opportunity to get exposure to the consumer sector,” Mobius says. He adds that “we want to get exposure before the multinationals come in — in the more developed emerging markets you will notice that multinationals have already come in and grabbed a large market share, […]

Shiller Worried More Housing Declines Ahead

  Yale Economist Robert Shiller says the long decline in housing prices may not be over yet. “Home prices show a lot of momentum; they’re not like the stock market. The real question is do we still have downward momentum?” Shiller tells FOX Business Network. “There are a lot of positive signs but a skeptic who believes in momentum and says it’s been going on now for six years, and I am a little bit of that skeptic, might well say it’s going to keep going down. After the seasonal blip is over, it may not be over.” Shiller also […]

The Lynch Strategy: Still Beating the Market Two Decades after Magellan

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 Peter Lynch-inspired strategy, which has averaged annual returns of 5.3% since its July 2003 inception vs. 3.1% for the S&P 500. Below is an excerpt from the newsletter, along with several top-scoring stock ideas from the Lynch-based investment strategy. Taken from the May 25, 2012 issue of The Validea Hot List Guru Spotlight: Peter Lynch Choosing the greatest fund manager of all-time is a tough task. John Templeton, Benjamin Graham, John Neff — a number of investors […]

Herro: Great Time to Be a Bottom-Up Investor

While it seems that all of the investment world is fretting over Europe’s debt woes, top fund manager David Herro of Oakmark is seeing a big opportunity. “As we all watch the macro playing out in Europe and elsewhere around the world, we’re thinking that this is a great time to be a bottom-up international investor,” Herro writes in a column for Morningstar. “Panicky short-term sellers are driving down share prices, and those of us focused on the long term are benefiting from the bargains.” Herro also says that the debate over whether Europe should focus on debt reduction or […]

Buffett-like Bargains North of the Border

Buy when others are fearful, Warren Buffett says, and lately, there’s been a lot of fear in markets, thanks to the resurgence of the European debt crisis. So in his Number Cruncher column, Globe and Mail’s John Heinzl takes a look at some Buffett-like bargains using Validea CEO John Reese’s Buffett-inspired Guru Strategy. “Mr. Buffett aims to buy solid businesses at ‘fair’ prices and often holds stocks for decades, Coca-Cola and American Express being two examples,” Heinzl writes. “He summed up his investing philosophy in his 1996 letter to Berkshire [Hathaway] shareholders: ‘Your goal as an investor should simply be to purchase, at a […]

Gross: U.S. Is “Cleanest Dirty Shirt”

PIMCO bond guru Bill Gross says that the U.S. is currently offering the best of several bad options for bond investors. “It’s what we call the cleanest dirty shirt, and at the moment the cleanest dirty shirt is the United States,” Gross told CNBC’s Street Signs. “It’s Treasurys, it’s those 1.75 percent 10-year Treasurys that are definitely overvalued but at a time of crisis appreciate in value or least least hold their value.” Gross also says Greece isn’t the end of the debt problems in Europe. “It’s a global crisis from the standpoint of too much debt and delevering,” said Gross. “Greece […]

All Downhill for U.S. Manufacturing? Not So Fast

Conventional wisdom has long held that the U.S. manufacturing sector is on the decline. But in a new research report, Kenneth Fisher’s firm offers a very different take. “The U.S., like most developed countries, has evolved into a more diversified economy, with a heavy emphasis on services, which account for around 70% of U.S. GDP,” the report says. “This isn’t unusual. Throughout history, economies have typically followed the same progression: agrarian to industrial to service.” The report finds that while manufacturing has declined as a percentage of total U.S. economic activity, manufacturing has also declined as a percentage of global […]

Has the Market Topped? History Says ‘No’

If the stock market has indeed already topped out, it would be an aberration by historical standards, Mark Hulbert says. In his MarketWatch column, Hulbert looks at a handful of indicators that have accompanied previous market tops, and finds that they aren’t flashing “end of the line” signals. Sentiment, for example, remains far from the bullish levels seen at past tops; monetary conditions are “no worse than neutral”; and valuation conditions are also “no worse than neutral”. Only technical indicators are flashing a warning sign, Hulbert says. “The bottom line?” Hulbert writes. “Two of the four categories are no worse […]

Siegel on Stocks, Euro Parity

While the market has struggled in recent weeks, Wharton professor and author Jeremy Siegel remains confident that the Dow Jones Industrial Average will hit 15,000 by the end of 2013. Siegel tells Bloomberg that given the recent problems in Europe and the “fiscal cliff” that the U.S. faces, more of the gains may be pushed into 2013 rather than this year, but he still thinks the Dow will reach that 15,000 target. He also says the Euro could get pushed down to parity with the U.S. dollar in the next six months as part of the resolution of the European […]

Would Buffett’s Latest Moves Impress The Gurus?

In his latest column for Forbes.com, Validea CEO and author of The Guru Investor John Reese takes a look at how Berkshire Hathaway’s and Warren Buffett’s latest moves stack up against his Guru Strategies — including his Buffett-inspired model. “My quantitative Buffett-inspired strategy is based on the approach that Mary Buffett (his former daughter-in-law) and David Clark, both of whom worked closely with Buffett, laid out in their book Buffettology,” writes Reese. “What do my Guru Strategies think of the latest Berkshire buys? Well, both GM and Viacom [which Berkshire initiated positions in recently] get interest from my models — though […]

Romick Not Excited By Market

Top mutual fund manager Steven Romick says he’s “maintaining the status quo” with his portfolio, because he isn’t seeing many enticing opportunities right now. Romick tells Tom Keene on Bloomberg Television’s “Surveillance Midday” that he thinks the market is “not inexpensive” right now, and says he sees a lot of risk to earnings — particularly all-time high profit margins. Corporate debt also doesn’t interest him right now, he says, adding that he has about 30% of his portfolio in cash. He talks about where he’s finding companies that can grow in a tough economic environment, and why he doesn’t get too concerned […]

Sonders on Sell in May, Positive Signs, and the “Fiscal Cliff”

Should you “sell in May and go away,” as the old investing adage says? Charles Schwab Chief Investment Strategist Liz Ann Sonders says not so fast. In commentary on Schwab’s site, Sonders says that it’s true that the market has historically performed better during November-April period than it has during the May-October period. From May 1 through October 31 each year since 1950, the S&P 500 has returned an average of 1.2%, she says, citing data from Ned Davis research. In contrast, the average performance from November 1 through April 30 each year since 1950 was 7.0%. But, Sonders adds, […]