Highly correlated markets make for good Opportunity

by Laura Ehrenberg-Chesler on September 8, 2011

in Investment Strategies

In this week’s edition of Barron’s,  an interview with portfolio manager Dan Chung at Fred Alger Management, reminded me that highly correlated markets can make for good opportunity.  If of course, you have the stomach for it.  My partner Marilou and I call it “the big whoosh”.

The “big whoosh” is what the market feels like when all stocks, regardless of valuation, market share, or profitability, get taken down in a big market decline.  When fear is the overriding emotion, and no one wants to own stocks, and it feels really bad to buy anything, that can be where real opportunity is created.

We don’t know when or if that will happen, but if it does, it could be an opportunity to buy companies that may be thrown out with the bath water.


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