67 WALL STREET, New York - January 24, 2013 - The Wall Street Transcript has just published its Investing in Asia and Other Strategies Report. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Investing in Asia - Growth at a Reasonable Price - Longer-Term Investing - Asia Pacific Investment Theses
Companies include: McDonald's Corp. (MCD), Procter & Gamble Co. (PG), Philip Morris International, I (PM), Vodafone Group plc (VOD), Verizon Communications Inc. (VZ) and many others,
In the following excerpt from the Investing in Asia and Other Strategies Report, an experienced portfolio manager discusses his investing philosophy:
TWST: Earlier in 2012, you wrote, "stocks are hated." What did you mean by that and how do you identify the opportunities from that type of situation?
Mr. Raposo: Generally, redemptions out of equity mutual funds have been at record levels since 2008, and that continues. Meanwhile, the market is up 100% from the 2009 low. So why is money flowing out of equity funds and into bonds with record low yields? Secondly, many institutional investors, pension funds and so on are underweight equities. And many individuals are still in fear of investing in stocks; however, our clients that stuck to their investment plan during the Great Recession and beyond have done very well. Individuals who have gotten hurt are the ones who tried to time the market, because it is almost impossible to do it perfectly. We don't think market timing makes sense for individuals. They get out and back in too late - absorb most of the downside and miss most of the upside.
And finally, stocks were trading at valuations that were factoring a second recession even as the economy was growing. Yes, stocks have moved up a lot, but earnings have moved up even more. We don't think stocks are overvalued. The S&P 500 index is still trading at 13 times or so next year's earnings, but the historical average is closer to 15 times to 17 times range. Yet we still see money coming out of equities and going into bond mutual funds. We think that's the wrong decision at this point. Historically, the retail investors buy high and sell low.
TWST: Would you paint a broad-brush picture of your expectations for 2013?
Mr. Raposo: We're generally optimistic on the equity side. We think that valuations, dividends and potential dividend growth could drive the equity market higher from the current levels...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
- Investment & Company Information
- Philip Morris International