J. Jeffrey Auxier Sees a Clear Advantage in Fundamental Analysis that Shows the Difference Between Risk and Volatility

October 11, 2018

J. Jeffrey Auxier is President of Auxier Asset Management LLC and Founder of the Auxier Focus Fund. Prior to forming Auxier Asset Management in 1998, Mr. Auxier spent 16 years at Smith Barney — formerly Foster Marshall-American Express, then Shearson — where he was on the Portfolio Management Advisory Board and the Chairman’s Council, and was Senior Vice President of Investments and Senior Portfolio Management Director. In 1997 and 1998, he was named one of the top-10 brokers in the country by Money magazine, winning two consecutive stock-picking contests.

In this exclusive 2,874 word interview for the Wall Street Transcript, Jeffrey Auxier reveals his current views on this volatile market:

“The past few years, momentum strategies have dominated in an environment where interest rates dropped to 5,000-year lows. The popular trade has been to short volatility and go long passive indexes. The problem with passive: You don’t know what to buy and when to buy it on the way down. The Nikkei Index in Japan traded over 38,000 in 1989. It dropped all the way to 7,500 over the next 20 years. If you don’t really know what you’re in, you don’t have the conviction to buy and accurately quantify the true risk.”

The award winning portfolio manager clearly delineates between volatility and risk:

“Types of managerial risk include overpaying, overborrowing, ignoring technological disruption, losing focus and general misallocation of capital. Those are examples of quantifiable business risks that can negatively impact intrinsic value. Volatility and corrections are a normal part of auction markets. The markets are pretty virtuous. They are going to correct really bad behavior. But long-term volatility is not the risk part of the equation.”

Read the entire exclusive  2,874 word interview with J. Jeffrey Auxier in the Wall Street Transcript and get the complete picture of the current market as well as his specific stock picks that will ride out the storm.