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"This type of environment  makes my job quite easy," says fund manager David Herro, who is...

"This type of environment  makes my job quite easy," says fund manager David Herro, who is "significantly adding" to his stock positions as 580 companies in the MSCI indexes trade for less than the value of their net assets. On the other hand, "safe" health-care and consumer products firms are trading at their highest level in more than 10 years, according to the same gauge.
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Comments (5)
  • Skull & Bones
    , contributor
    Comments (59) | Send Message
     
    If he likes stocks here......he'll love them later this year at 15-20% lower.
    22 Jun 2012, 08:18 AM Reply Like
  • klarsolo
    , contributor
    Comments (705) | Send Message
     
    Don't take it the wrong way, but on average, the more certain people are about what's going to happen in the markets, the less experience and skill they seem to have.
    22 Jun 2012, 08:25 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9950) | Send Message
     
    klar,
    Just curious, but does your same logic also apply to the various fund mangers quoted in the article who are so certain that their picks represent cheap buying opportunities?
    22 Jun 2012, 08:38 AM Reply Like
  • klarsolo
    , contributor
    Comments (705) | Send Message
     
    It absolutely does. Most of them underperform their benchmarks, but why would they care, they are being paid the big bucks regardless, because most Mom & Pop investors probably don't even look at how the benchmarks did.

     

    Most of these managers are smart people, but all the smartness in the world will not help you to figure out the future. What *does* help is when you assume that you do NOT know what is going to happen and that almost everything is possible. Only under that premise can you start to develop a good risk management process.
    22 Jun 2012, 08:42 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (1030) | Send Message
     
    A significant component of a good risk management process is to have a metric that indicates when a good stock might be undervalued with a good dose of "margin of safety" thrown in. If the fund manager in the article is speaking from such a position, he may come across as being over-confident, but actually may just be doing his job.
    22 Jun 2012, 08:59 AM Reply Like
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