“There is always a price for everything” where it becomes too cheap not to own. So says Ketterer, Chief executive officer and cofounder at Causeway Capital Management, an international value manager with $52 billion under management. She was Morningstar International Manager of the Year in 2017.
With a wave of money washing over the globe, it has been mostly going to higher profile growth and momentum sectors. During the decade following the financial crisis, scared equity investors have ignored inexpensive cyclical stocks in favor of growth. The result, according to Ketterer, are many favorite value names trading at crisis-level valuations despite excellent balance sheets and strong business prospects. Indexing, momentum trading and crowding is why many of these stocks are trading far below intrinsic value. She notes that “If you want to own the beneficiaries of recovery you need to own them during the dark gloomy periods.” When value snaps back it tends to do so very quickly. In her opinion, this makes today a great opportunity to make contrarian bets on European and EM value plays.
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Next week, we speak with Academy Award winning producer Brian Grazer. His film and television credits include A Beautiful Mind, Apollo 13, Arrested Development, 8 Mile, Splash, Backdraft, Liar Liar and The Da Vinci Code; His TV productions include Arrested Development, Sports Night, and 24. His new book is Face to Face: The Art of Human Connection.
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