Chuck Royce interview: Q. After five months of difficulties for stocks, do you anticipate further declines? A. We could definitely see further declines. At the end of the day, a drop of 20% or more from the Russell 2000’s interim peak in July wouldn’t surprise me at all. However, I do think that the worst is behind us.
The most depressed areas of the stock market, such as financial and consumer stocks, have already been hit very hard, and I don’t think subsequent price erosion will be as acute as what many companies in those areas have already endured. Bad news travels quickly, and the effects hit stocks hard and fast, which is actually why we’re optimistic about the next three to five years. While we’re always focused on downside risk, we are just as excited about promising longterm opportunities that we see in certain smaller stocks in the current market. We understand that no investor enjoys these periods in which so many companies seem to be struggling and returns are falling further into negative territory. At the same time, declines, corrections and the occasional bear market are part of the price of doing business in the stock market, especially if one is in it for the long haul, as we have been since 1972. And these are precisely the times when we seek out risk, because so many others are avoiding it.
Read the complete interview
The most depressed areas of the stock market, such as financial and consumer stocks, have already been hit very hard, and I don’t think subsequent price erosion will be as acute as what many companies in those areas have already endured. Bad news travels quickly, and the effects hit stocks hard and fast, which is actually why we’re optimistic about the next three to five years. While we’re always focused on downside risk, we are just as excited about promising longterm opportunities that we see in certain smaller stocks in the current market. We understand that no investor enjoys these periods in which so many companies seem to be struggling and returns are falling further into negative territory. At the same time, declines, corrections and the occasional bear market are part of the price of doing business in the stock market, especially if one is in it for the long haul, as we have been since 1972. And these are precisely the times when we seek out risk, because so many others are avoiding it.
Read the complete interview
