This article is a fascinating analysis of the global economy by the managers of the Forester Value Fund. I’m watching events unfold in Greece and at this point it seems that we cannot really predict what will happen. It is possible that the euro, as a currency, may be redefined. Even more attention getting was the Chinese government’s very overt support of their own crashing stock market. Our portfolios are diversified so we have the relative luxury of watching all of this unfold from a distance. If markets decline, we will be hunting for bargains wherever they reveal themselves.
Here are some notes from a conference call with Jeff Auxier of the Auxier Fund.
Auxier Fund has a long term track record which compares decently with the S&P 500. It also lags for YEARS when the market is hot. Historically the fund has less risk than the S&P 500 too. I feel that Jeff Auxier is one of the mutual fund managers with deep insight into what is happening in the financial markets.
Europe currently has some bargains, which are now “hopelessly out of favor”. Long term, these are great opportunities.
The decline of oil prices is a $125 billion annual stimulus to the U.S. economy, a “major game changer”. We are “awash in energy globally”. We are also facing the potential of “massive deflation”. We should be careful that we don’t invest for oil bargains too early because these oil gluts can go on for years. My observation: in fact oil has a history of extreme volatility, and market forces tend to help bring oil prices down.