Investor Fear and Pessimism Are Overblown?? http://finance.yahoo.com/blogs/breakout/investor-fear-pessimism-overblown-145309428.html;_ylt=AlMv0yx4DmSDp5MdhHSTHG.7YWsA;_ylu=X3oDMTE5Y2ZlMWNzBHBvcwMzBHNlYwNGUEJyZWFrb3V0QmxvZwRzbGsDaW52ZXN0b3JmZWFy
Growth in China eased from 9.5% in the second quarter to 9.1% in Q3 --the slowest pace since 2009. The data point certainly validates concerns about the world's second largest economy and a potential drag caused by the ongoing European crisis with no resolution. But not every investor is derailed by the shaky global climate. "The world is not going to stop spinning on its axis, it's not as destructive and as bad as some people thought," says Oliver Pursche, president and portfolio manager at Gary Goldberg Financial, in the attached clip. His case for owning stocks and commodities right now is largely built on that haunted house that is fear of the dark, especially when it gets as "overblown" as Pursche thinks it is in certain markets. Domestically, he believes there won't be a recession and that investors need to ''bifurcate" their expectations for the entire S&P 500 from the opportunities that exist in particular sectors and stocks. For him, the latter offers the greater opportunity, especially large cap multi-nationals that "have been thrown out with the bath water" that have strong balance sheets and also pay a good dividend. Globally, Pursche also thinks there won't be a worldwide recession and says "the hard landing worries are overblown on China." Again, he thinks it is important to conceptually split the idea of investing in China into two pieces: One being the massive country itself, the other being the vehicles used to capture its growth via ETFs, mutual funds, or multi-national companies. Like so many others who have appeared on this program, Pursche is a big fan of what I have dubbed the LCMNs (large cap multi nationals). At the same, his attraction to commodities right now is also largely based on overreaction. "Fears of a significant recession in Europe and demand destruction in Asia are way overblown" he says. "So we think commodities are underpriced and oversold." As a result, he thinks the dollar has become artificially strong and predicts its eventual weakening and the Euro strengthening will also bolster commodities. He says in the past few weeks people have come to realize that "things aren't great but they're not horrible either." Maybe so, but that's with the lights on and it could get dark and scary again real soon.
