In their latest column for Kiplinger’s, Whitney Tilson and John Heins say the current investment climate is among the most dissonant as they’ve ever seen — and that the contradictory stances investors have toward stocks are making for a myriad of opportunities.
Tilson and Heins say investors are “torn between wanting safety and craving yield”, and are piling into Treasury bonds while at the same time pumping cash into emerging markets and junk bonds. In the stock market, the duo says, investors are “torn between their disgust at the lousy returns of blue chips over the past ten years and their expectation that stocks should outperform other investments.” As a result, they say, “many of the least-risky blue-chip stocks are extremely cheap, while the shares of some firms with less-predictable or speculative prospects are expensive.”
That has Tilson and Heins feeling good. “We consider investors’ contradictory stance toward risk in stocks to be great news,” they say. “Everywhere we look, we see wonderful opportunities both to own stocks and to sell them short.” To see some of their blue-chip picks, click here.