August 14, 2022

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Seven deals for value investors |  Finansavisen

Seven deals for value investors | Finansavisen

The broad S&P 500 is down about 20 percent so far this year. The first half was the worst in more than five decades. to me Market Watch The Prudent Speculator newsletter editor, John Buckingham, believes the damage has already been done, and recommends buying 7 valuable stocks.

The Prudent Speculator is published by Kovitz Investment Group in Chicago. The average annual return for a 30-year TPS portfolio is 14.5 percent. By comparison, the S&P 500 has an annualized return of 9.9%.

The TPS portfolio consists of 80 shares and investments are made with a time horizon of 3 to 5 years. Buckingham is looking for liquid stocks, which should be undervalued compared to the market. Thus, he wants to find the firms with lower prices as compared to profits. He says the TGS portfolio has a futures P/E of 10.4, while the S&P 500 futures P/E is 16.8.

He says the fall this year is exactly what you want to see if you have money to invest. In a recent report, he highlighted 7 stocks that are good value. Among the companies he highlights are Meta, Micron, and Capital One. These shares fell by 51, 34 and 25 percent, respectively.

In an interview where he explained the role of market psychology in investing, he said, “You don’t want everyone to feel euphoric. You want them to fall into landfills.” This must be because it is not uncommon for stocks to drop by 20 percent and such declines are expected. And that dips are embraced for long-term success.