The famous money manager has pulled off a 10.5% annual average since 1992 when he started his fund. His success strategy is very simple: buying good business at price at least 40% discount from estimated value.
What about if one is confident about the value estimate and yet the stock keeps declining, “keep buying more”, he said.
Right now David Herro has a bulk of his money invested in Europe. One example he gave is Banco Santander (STD) which draws 70% of its profit from Brazil, Mexico, UK, and even US. It is based in Spain and has some sovereign debt of Spanish government, therefore it is penalized. But Herro thinks it is undervalued and has bought a large position.
As of now, Herro thinks it is perfect time to look at stocks. He thinks US economic concerns does not overshadow global growth. However, he does not think emerging stock market represents good value as all the good news tend to be baked in the price already. Taking a contrarian viewpoint, Herro thinks Japan is sweet spot to invest in currently.