Jim Moffett, lead manager of the large-cap Scout International Fund and a three-time nominee for Morningstar’s International Stock Fund Manager of the Year. More thoughts:
At this point, it blows my mind to see people piling into a low-return investment, whereas if you look at stocks in this country and around the world, companies in general are in a lot better financial shape than they were. You look back at longer-term values, and equities are relatively undervalued at this point. I believe you can get a better yield on the average Standard & Poor's stock than you can on 10-year Treasuries. Unless the world's going to fall apart—which we don't think it is—that argues for equities, not this week or next, but for the long term.
And this country doesn’t have a monopoly on good ideas. There are a lot of smart people around the world running good businesses. In general, they’re available at very attractive prices. Interestingly, their yields are, in general, a little bit better than ours.
Contrarian ideas from Old Europe and Japan
There's a little of a contrarian in us. Looking at Old Europe, there are some great companies that are available at what I believe are reasonable values, including health care companies. Even in Japan, there are some interesting situations. Japan doesn’t change very fast, but 20 years ago, the typical Japanese company had lots of debt. Now, their balance sheets are in good shape. We think there may be some interesting opportunities there.
High on global tech and resources
We like technology. As we grow out of this, companies are going to be spending to improve their production processes. Consumers are still going to buy their little electronic gizmos. We think that’s one of the places where the action is going to be.
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