A major concern of investors is the age of this bull market. It’s been eight years since the famous bottom at 666 in the S&P 500 on Friday afternoon on March 6, 2009.
Is it time to sell?
We asked Jeffrey Auxier, named one of the top-10 brokers in the country by Money, and President of Auxier Asset Management LLC and Founder of the Auxier Focus Fund.
Mr. Auxier points out: “I think if people understand that a dollar invested in 1965 requires almost $7.50 today, they would not have a penny invested in fixed income at today’s price and yield levels.”
Mr. Auxier’s exclusive interview with The Wall Street Transcript reveals his current picks. One is Citigroup (NYSE:C):
“The stock is down from over $500 in 2007. I mean, it’s still at maybe $60, and you’ve got Michael Corbat, he’s actually a really good banker, and you’re looking at potentially $70 billion being returned with the new rollback in regulations to shareholders in these bigger banks.”
Auxier Asset also identifies two biotech stocks as unusual values:
“…we like Amgen (NASDAQ: AMGN), the number-one biotech company in the world, at 12 times earnings, $38 billion in cash, $6 billion in free cash flow. When you can buy leading biotech businesses for that low valuation, it has been a historically attractive entry level. Biogen (NASDAQ:BIIB) is another industry leader, research-focused, that’s trading around 12 times earnings and, again, with the leading position in MS and Alzheimer’s.”
This week we also interviewed a money manager who beats the market both long and short. Adam J. Patinkin, CFA, is the Managing Partner and Portfolio Manager of David Capital Partners, LLC, a Chicago-based investment firm that employs a value-oriented long/short equity investment strategy.
This top performing portfolio manager is mathematically indifferent to the age of the bull market:
“…due to our differentiated investment program for both longs and shorts, our portfolio has generally been uncorrelated. Since inception, the portfolio has an R-Squared to the S&P 500 Index of 0.11, an R-Squared to the Russell 2000 Index of 0.08, and an R-Squared to the HFRX Global Hedge Fund Index of 0.06.”
On the short side, Mr. Patinkin reveals, “One of our top themes at the moment is to be short U.S. hotel REITs. If you look at the U.S. hotel sector, demand for hotel rooms has consistently grown about 1.7% per year. Whenever supply growth goes above 2%, it should set alarm bells ringing that supply growth is now outpacing demand growth. In 2017, supply growth will be above 2%. In 2018, supply growth will be nearly 3%. We think the alarm bells are ringing.”
We also interview the highly regarded asset manager Bryan J. Spratt, CFA, a Portfolio Manager at Miller/Howard Investments, Inc. Mr Spratt explained his infrastructure focus:
“At its core, infrastructure can be defined as the essential services and foundational assets in society that make up the backbone of the economy.”
One of his top picks is MDU Resources (NYSE:MDU), a Rockies-based utility that also has construction services and construction materials like gravel pits, asphalt and cement.
These three money managers reveal a common theme from this week’s group of top portfolio managers — that it’s always a good time to invest your money wisely.
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