Friday, November 17th, 2017

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Contrarian Investors See Equity Opportunities Amidst Pessimism

Some investors are buying when everyone else is selling.The past decade has been overwhelmingly disappointing for equities investors – the S&P 500, Dow Jones Industrial Average and Nasdaq have all generated negative returns since 2000, and many investors are understandably wary after the 2008 meltdown and the so-called "Flash Crash" back in May.

For a few big players, though, the current market represents a bonanza of investing opportunities. Heavy hitters like John Paulson of Paulson & Company (who became famous for "calling" the housing crash), Bill Miller of Legg Mason Capital Management and Robert Olstein of the Olstein All Cap Value Fund see big, household American names going for huge discounts.

"In this market, the pickings for a value investor are easy," said Olstein in a New York Times profile this weekend. His fund holds stocks like Intel, Microsoft, Home Depot and Ingersoll Rand – all of which have strong cash flows and relatively low historical valuations.

Drug companies are another strong possibility. "Yes, the job numbers are frightening," Michael Hintze, the founder of CQS Management, a fixed-income hedge fund based in London, told the Times on Tuesday. "But that does not affect a company like [GlaxoSmithKline], which sells a value-added product into markets like China, the U.K. and Indonesia."ADNFCR-3389-ID-19940760-ADNFCR

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