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European troubles offer buying opportunity and better value than U.S. stocks

Kevin Chupka
Executive Producer/Writer

Much was made of Europe’s impact on last week’s wild ride on Wall Street. What wasn’t mentioned was that Europe’s troubles also signal a realy buying opportunity, at least according to Patrick O’Shaughnessy, portfolio manager at O'Shaughnessy Asset Management

“The good news for value investors out there is this is exactly the headline risk that creates opportunities,” he told Yahoo Finance. “While the economic situation and Germany’s relationship with the ECB and with the rest of Europe certainly screams panic or caution, what it creates is buying opportunities.”

Still, there is a difference between headline risk and Europe going over an economic cliff. While admitting that is something to be watched, O’Shaughnessy believes we’ve seen enough in the recent past to safely bet on European stocks.

“I think we’ve learned enough lessons recently,” O’Shaughnessy says, “on a global scale, teetering on the brink here in the U.S. and globally just five years ago, that if we got to that point in Europe that those that have the ability will do what they need to, to keep it from going over the cliff.”

That, O’Shaughnessy says, is enough to look at some of the value plays across the pond, especially because, “Europe is trading at very big discounts to the U.S. on things like price to earnings ratios.”

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