Oct 12

Tilson: There's value in stocks, but don't chase them

By MultiplyWealth's Team


Hedge fund manager Whitney Tilson at T2 Partners warned at the Value Investing Congress this week against doubling down on stocks following an already strong bull run.

Still, he laid out a case for why stocks are still offering a better value than bonds for long-term investors.

As part of a multi-page slideshow obtained by Business Insider, he wrote, “I am cautiously optimistic that a tepid economic recovery will continue in the U.S., but with the S&P 500 up more than 16% year-to-date, the markets have already had a good year. So I don't see much upside
unless the economy really takes off, which I think is unlikely.”

Tilson also named four factors that could derail the U.S. economy:

1) A turn for the worse in Europe

2) A downturn for the U.S. housing market

3) The economic slowdown in China becomes a hard landing

4) A sovereign debt crisis in Japan

Yet long-term investors with a 10-year horizon are still better off buying dividend paying blue-chip stocks at reasonable multiples, rather than low-yielding U.S. Treasuries -- especially given the high level of U.S. sovereign debt, according to his presentation.


If you want to talk about how potential market events or the fiscal cliff might affect your equity portfolio, and perhaps talk about whether some of our defensive-minded investment strategies might be right for you, write Multiplywealth at notice@multiplywealth.org It’s your own account; you can see the balance change on a daily basis, make investment changes extremely quickly, and add to or pull your money at your complete discretion.


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