Watch the replay of a Morningstar webcast featuring Pat Dorsey and panelists Doug Ramsey of Leuthold, Tom Forester of Forester Value, and Ariel's Charlie Bobrinskoy.
This is the full interview:
In this segment, the panelists discusses why high quality companies such as Johnson & Johnson is so cheap.
This is what Ariel’s Bobrinskoy has to say:
Bobrinskoy: Just in terms of explanation, I think you've got to look at two things. You've got to look at flows. So, as big pension funds have been selling stocks, they've been selling large-cap stocks. So, Exxon, J.P. Morgan, J&J have all underperformed.
Second, there is a big trend, which is government regulation. There are certain industries in which the government has not been helpful over last year or two, and health care and financials and for-profit education would be three examples. So, getting in the way of the government has not been a good place to be.
Then just lastly I'd say that J&J and the whole health-care industry has been a little bit more economically sensitive than we all would have guessed. So people have not replaced that knee or hip because of the tough economy. They may be have been a little more concerned about the high-cost drugs. A number of J&J's businesses are volume sensitive, and volumes have been a little lighter than I think all of us would have expected.
In this clip, the panelist reflect what the biggest risk as they perceive it:
The panelists discuss market valuation level:
Here is a topic fund managers would rather not talk about:
GuruFocus tracks the stock portfolio of Ariel Capital Management under John Rogers.
Go To Morningstar for the full transcript of this interview.