After a fierce rally off March 2009 lows, investors could reasonably conclude that opportunities are scarcer today. Need a wider net? We checked in with five notable "go-anywhere" managers--those with a freer rein to invest over the market-cap spectrum, around the world, within multiple bond sectors, or even across asset classes--to see how they're positioning their portfolios today, and where, in their bigger playing fields, they're finding the best ideas.
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Skate to Where the Puck Is Going to Be
- David Winters, Wintergreen (world stock): See Below
- David Decker, Janus Contrarian (large blend): Page 2
- Michael Avery and Ryan Caldwell, Ivy Asset Strategy (world allocation): Page 3
- Brian McMahon, Thornburg Investment Income Builder (world allocation): Page 4
- Art Steinmetz, Oppenheimer Strategic Income (multisector bond): Page 5
's David Winters on:
We clearly had a big rally, but there are some companies and businesses that are doing just fine, and their securities are still compelling. So we still think there's lots to do. It's not the bottom of a panic, but still, we're very constructive.
[We] own securities that aren't as well known or part of the index; they often have a tendency of lagging. For example, we own Jardine Matheson. But Jardine's still very cheap. The businesses are doing well. The part of the world they're operating in is doing great. And the stock's done fine, but it still could trade at a 40 or 50 percent discount of what it's worth.
Most investors are still in hiding. Even though we've had a big rally, you have a lot of people who, [based on] the mutual fund flows, ... are buying long-term bonds with low coupons. So I think confidence has to return, and I think, as these companies put up their results on the boards, people will notice. But sometimes it just takes time.
Bonds vs. Equities
People have a tendency of chasing yesterday's story, and I think that's what's going on with fixed income. Part of the reason that we've favored equities and favored really high-quality equities is because you can buy wonderful businesses today at very reasonable prices with really good management. That hasn't existed in most of our investment career. ... That's where we think investors should be focused, but they're really focused on low coupons where the risk is not only higher rates at some point but of inflation, which no one talks about.
U.S. vs. Foreign Investments
From a macro perspective, the U.S. is a mature economy with a lot of debt. When you look at what's going on outside the 50 states, that's where a lot of the real economic activity is right now and would appear to be in the future.
We're really focused on these non-U.S. companies that can capture those opportunities, or U.S. companies that have generally a lot of foreign exposure.
Wayne Gretzky, the Canadian hockey player, said, "Skate to where the puck's going to be," and we think the puck is definitely beyond the borders of the United States.
I think the Far East has got to be one of the most fertile parts of the world. There are lots of different ways to participate in it, not just through companies that are listed in the Far East.
We like Swiss companies like Richemont, that owns Cartier. That's really well positioned to capitalize on the greater wealth that's in the Far East, and then being created through ownership of brands like Cartier. We really think that's where the action is.