Photo: Screenshot via Bloomberg
BUY THE DIPS (in all caps like that) is the headline of hedge fund manager Barton Biggs’ latest note. So right off the bat you know his general stance.His general idea is that while sure there are all kinds of things to get nervous abou (The Arab Spring, Japan, the EU mess, etc.,) a lot of stocks are just cheap.
He particuilarly likes tech:
Thus I’m still not attracted to European equities as an asset class, although I do have a basket on of
European companies with a high percentage of their earnings from the developing markets. In fact, the
basket was my best performer in April. I’m still big in U.S. tech, both the old champions and the new
contenders. The former are just too cheap at below S&P valuations in relation to their above average,
albeit reduced-growth prospects. Recently I listened to a revered value investor expound on the once-in- a-generation opportunity to buy the likes of Cisco, Intel, Microsoft, IBM, et all.
The new tech centurions playing around in the Cloud and Remote are not as cheap, but their growth
rates and potential are much more exciting. Nobody believes that companies like Apple, Qualcom, and
VMWare can keep growing so astronomically, and I don’t either, but at 13-14 times next twelve month’s earnings playing around in the Cloud and Remote, all they have to do is grow 15%-20% annually to be compelling investments. I also continue to hold, despite the turbulence, energy-related names ranging from Exxon to Schlumberger. I believe! The industrial machinery, capital goods stocks look like buys again, and small-cap value ETFs make sense.
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