David Winters:The Optimist Portfolio Manager

October 5, 2012

Central bankers are clearly worried about global growth. From the U.S., to Europe, to Asia, we have seen unprecedented levels of easing in recent weeks. By independent research firm ISI Group’s count, there have been more than 250 stimulative policy initiatives announced over the past 13 months. The firm also points out that we are less than 100 days from the famous fiscal cliff in the U.S., when numerous Bush era tax cuts expire and automatic spending cuts take effect if Congress and the White House can’t reach a budget compromise. If they don’t, estimates are that GDP growth could be reduced by as much as 3.5%, sending the economy into recession.

Meanwhile, stocks have rallied strongly this year largely because of all of those central bank actions, which have given some investors confidence that the world will continue to muddle through the challenges of a widespread economic slowdown. Individuals, however, are still not participating in large numbers. Retail investors continue to favor bonds over stocks- a winning move for them until this year, and a trend we’ve been tracking for months. This week’s guest disagrees with such bearishness and believes investors are missing several attractive opportunities around the world. He is Great Investor David Winters, portfolio manager of the five-star rated Wintergreen Fund, which he has been managing since he launched it in 2005. The go anywhere, invest in anything value-oriented fund has outperformed its category and the markets since its inception. Wintergreen is a sponsor of WEALTHTRACK but David is clearly here on his own merit. I began the interview by asking David about what he considers a major investor misconception, phrased by great bond investor Bill Gross at PIMCO as “the cult of equity is dying.”
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WEALTHTRACK Episode #915; This program was originally broadcast on October 5, 2012. Listen to the audio only version here: David Winters #915

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Guest Info

David Winters Portfolio Manager Wintergreen Fund

Newsletter

Consuelo MackDear WEALTHTRACK Subscriber, Is there a disconnect between the stock market and economic reality? Here are some statistics that might interest you, sent to me by Royce Associates’ David Nadel, who manages or co-manages 7 mutual funds for legendary small cap pioneer Chuck Royce: -the U.S. labor force participation rate is 64%, a 31-year low -real median household income is at a 42-year low -15% of the U.S. population is on Food Stamps And from FPA Crescent Fund’s Steven Romick we get these gems: -mandatory government spending, off budget items including Social Security, Medicare and yes, interest expense, now account for 64% of all government spending and rising. -Social Security recipients, who now account for 17% of the population, have only 3 workers supporting each one versus 42 workers per SS beneficiary in 1935. -49% of U.S. households receive some sort of government transfer payment up from 30% in the early 80’s. You get the picture. The economy is in rough shape and slowing. The government is living way beyond its means and its obligations are increasing, yet the market is rising. The S&P 500 rose for the fourth day in a row on Thursday and is now up 16% on the year to 1,461.40. Much of the credit goes to central bankers who are clearly worried about global growth. European Central Bank (ECB) president, Mario Draghi, boosted the markets today by reiterating his pledge to start buying government bonds as soon as necessary conditions are met. By independent research firm ISI’s count, there have been well over 250 stimulative policy initiatives announced over the past 13 months, which have given some investors confidence that the world will continue to muddle through the challenges of a widespread economic slowdown.  Individuals however are still not participating in large numbers. Retail investors continue to favor bonds over stocks, a winning move for them until this year, and a trend we’ve been tracking for months. This week’s guest disagrees with such bearishness and believes investors are missing several attractive opportunities around the world.  He is Great Investor David Winters, portfolio manager of the five-star rated Wintergreen Fund which he has been managing since he launched it in 2005. The go-anywhere, invest-in-anything, value-oriented fund has outperformed its category and the markets since its inception. Wintergreen is a sponsor of WEALTHTRACK but David comes to us as our guest this week on his own merit. In our WEALTHTRACK Extra section on our website, we ask our guests for additional insights that we don’t have time to include in our weekly program. This week, Winters shares the best investment advice he has ever received, as well as comments on the impact the election could have on the markets. For those of you who would like to see our program 48-hours in advance of the broadcast, you can subscribe to our WEALTHTRACK Premium subscription service. Have a great Columbus Day weekend and make the week ahead a profitable and a productive one! Best regards, Consuelo

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Wintergreen Fund (WGRNX)
First Eagle Global Fund (SGENX)

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