In a recent interview with Steve Forbes, value investor Whitney Tilson — who called the housing bust — says that he expects it will be another 12 months before the economy bottoms, but adds that he still sees plenty of opportunities in the market. Tilson says his hedge funds have scaled back their equity positions a bit but remain net long, having gone from a 100% long/50% short approach a few months back to an 80% long/50% short position today. Tilson says he foresees a choppy market for the next couple years as corporate profitability will face big headwinds. But, he adds that it appears likely that we’ve staved off “Armageddon” scenarios that were very real not too long ago.
In addition, Tilson also talks about why he thinks we’re headed away from the recent macro-driven environment to a stock-picker’s market; why he thinks Berkshire Hathaway is still a very good buy; why commercial real estate is a coming “train wreck” for the financial sector; and why investors shouldn’t buy financial stocks unless they really know how to assess a firm and its balance sheet.
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