IS the stock market making you queasy? Even with the market’s September surge, the losses, stress, and turmoil of the last lost decade provide plenty of reasons to stay on the sidelines.
Why not just hold cash, bonds or gold? They have done better than stocks for months, and investors have pulled billions of dollars out of domestic stock funds. But the standard reasons for sticking with equities still make some sense: over the long haul, stocks have produced better returns than other assets, and if you pick the right stocks — a big “if,” to be sure — you may have spectacular results.
In practice, though, betting on stocks demands a higher level of confidence than many people now possess. Is there a way to improve the odds?
Robert A. Olstein, a forensic accountant turned money manager based in Purchase, N.Y., thinks so. He practices a version of value investing — the disciplined, often-contrarian approach to security analysis refined decades ago by Benjamin Graham and David Dodd.
Mr. Olstein, 69, looks for stocks that are selling at a significant discount to their “intrinsic value” — what a company would be worth if it were privately held. For his flagship mutual fund, the Olstein All Cap Value fund, he says he is finding more bargains among American blue-chip stocks than he has ever seen.
His fund’s biggest holdings are household names that are generating significant amounts of cash, yet selling at prices he finds very reasonable. They include Intel, Microsoft, Macy’s, Xerox, DuPont, Radio Shack, Alliance Bernstein, Home Depot, Legg Mason and Ingersoll Rand. Their abundant cash flows should enable them to make moves like share buybacks, increased dividend payouts, mergers and acquisitions, which, he said, should serve as a catalyst to raise prices.
The full article can be found here-_http://www.nytimes.com/2010/09/12/business/12stra.html?src=busln
http://www.valuewalk.com/
Disclosure: Long Ingersoll Rand
