Investing legend: Stocks are ‘silly’ cheap…
From Dr. Steve Sjuggerud, Editor, True Wealth:
“These [recent] selloffs have created silly prices,” contrarian hedge-fund manager Dan Loeb said on Friday during a conference call.
“We’ve actually increased our [buying],” he said.
Loeb is bold… He thinks for himself. And he’s willing to invest when nobody else is.
His style has paid off for his investors…
If you invested $100,000 with Loeb in 1996, it would be worth more than $1.7 million today – giving him one of the best long-term track records out there right now.
Today, he thinks the fear and concerns that people have about the economy are overblown…
“We see a lot of people that are on alert,” he explained, “but there haven’t really been any signs of recession from either the economic data, the surveys, or our individual conversations with companies.”
This is a critical thought as an investor…
You see, I’ve learned that the best time to invest is when reality is different from perception.
The perception right now, as Loeb says, is that times are bad. The reality is that things are actually better than most people think.
- Life’s “important stuff” (food, shelter, and gas) is affordable.
- Most people have jobs (the unemployment rate is 4.9%).
- Interest rates are near record lows.
The point is, the news is surprisingly better than people think…
Most people disagree with me… but this disagreement creates our opportunity.
Investor panic reached a crescendo in early February. I agree with Loeb… It reached an “overblown” level, and when we finally break out of the fear, I think stocks could do extremely well.
So where’s Loeb putting his money to work? Not in oil companies…
Energy stocks face the risks of high debt levels and now the threat of equity offerings to shore up the balance sheets.
Instead, he likes health care, industrial, and consumer stocks.
Loeb is one of the world’s best investors. And he’s using the recent investor panic as a buying opportunity. I will join him, once I’m confident we have an uptrend in place.
Are you bold enough and contrarian enough to pull the trigger?
Think about it!