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If this notoriously bearish fund manager is finding value, you better believe opportunities abound

Many have labelled this the “most hated bull market in history.”

They point to high valuations.

Slow growth.

Trump’s unpredictability.

A house price bubble.

Rising interest rates.

Much more likely than all that, they’re hating this bull market because they’ve got a bunch of cash sitting on the sidelines, earning bugger all interest, and they feel like it’s too late to buy now.

No-one likes being late to the party. Missing out on the action.

Most of all, they HATE losing money

And the fear is, investing in shares right now, at these elevated levels, the chance of losing money is VERY high.

Headlines like these in The Australian Financial Review don’t help…

“Valuations near ‘dot-com bubble’ levels may halt the bull market”

Talk about scaring the horses…

The article says, once you take out the booming resources sector, the ASX’s forward P/E of 16 times earnings is “not that far off the record high multiple of 18 times reached when the tech rally was in full throttle mode in 1999.”

It’s almost like saying, once you take out the other 17 teams, Hawthorn is back on top of the AFL ladder again.

Especially when you consider the catalyst for the dot com crash was NOT the valuations on “old school” blue chip stocks, but the collapse of tech companies, many of which were generating minuscule amounts of revenue and burning cash like it was confetti.

It was always going to end in tears…

This bull market is about as far away from the irrational exuberance of the dot com bubble as our politicians are from reality.

A couple of days ago, some were saying soft US earnings might be a catalyst for the stock market to fall.

Overnight, the Dow soared 174 points higher.

The Nasdaq hit a new record high.

So much for that theory…

Yet people are still hating this bull market.

What they fail to realise is that this is perfectly normal for a bull market. A bull market driven by strong earnings growth, in an economy with low unemployment, and with interest rates at record low levels.

The vast majority of Australian investors don’t touch US stocks.

I can’t fathom it, especially now the cost of trading through a broker like OptionsXpress is now less than just five US dollars.

Lead by our own Scott Phillips, our Motley Fool Share Advisor advisory service focuses almost exclusively on recommending high quality, growing ASX stocks for its thousands of members.

Companies like Corporate Travel Management Ltd (ASX: CTD), up over 840 per cent since Scott first recommended it as a buy.

Companies like NIB Holdings Limited (ASX: NHF), up over 210 per cent since Scott first slapped a buy recommendation on the health insurer.

Stating the obvious, such returns are stunning, potentially life-changing. A $20,000 investment made in each of those two stocks would now be worth over $250,000.

As well as recommending winning ASX stocks, as a bonus, every single month Scott and the Motley Fool Share Advisor team also pick one US-quoted stock.

If you thought the returns above were good, they’ve got nothing on the returns Netflix has generated — it’s up a stunning 1,577 per cent for Motley Fool Share Advisor members who were lucky enough to buy.

Find out the full story by clicking here.

There’s an old saying that bull markets climb up stairs and fall down elevators.

Put another way, you make money slowly, but lose it quickly.

We all like to see our stocks soar 10 per cent higher, in a single day. It happens, sometimes, like it did this week with one of Andrew Page’s brand new “best buy now” dividend stock picks.

Great stock market wealth is created over years, not days.

A case in point? Courtesy of the miracle of compounding returns, a massive 99 per cent of Warren Buffett‘s wealth was earned after his 50th birthday

Warren Buffett doesn’t hate bull markets.

Warren Buffett doesn’t sit on the sidelines waiting for the next stock market crash. When he sees opportunity, he buys.

Warren Buffett doesn’t get scared out of the stock market in times of inevitable volatility. Quite the opposite in fact, being greedy when others are fearful.

While the mainstream press is focusing on the blue chips…

— Stocks like Coca-Cola Amatil Ltd (ASX: CCL), its share price getting smashed today after warning profits will decline for the first half of 2017. You can’t say I didn’t warn you.

— Calling the blue chips overvalued, something I’ve been warning about for some time, especially considering their limited growth prospects…

They are completely overlooking the opportunity today.

It’s in high quality growth stocks, many of which are trading at attractive valuations, relative to their growth prospects.

Fund managers are seeing the opportunity.

Our own Joe Magyer, Chief Investment Officer of our sister company, fund manager Lakehouse Capital recently called this “a promising environment for our strategy.”

Joe’s about as bearish as they come. He once shocked a crowd of 500 Motley Fool members by saying he’d only be interested in buying Commonwealth Bank of Australia (ASX: CBA) shares at $30. Today, CBA shares trade around $85.

So if he’s finding value, you better believe opportunities abound.

The AFR recently quoted Bennelong Australian Equity Partners senior analyst Neale Goldston-Morris as saying quality stocks were undervalued.

“The premium for quality is now the lowest its been in a very long time,” he told investors.

All of which is music to the ears of our own Scott Phillips.

As is often the case, Scott is in ahead of the game, recently slapping a buy recommendation on a high quality company whose sales of its flagship product have recently jumped almost 60 per cent higher.

Scott likes the stock so much he’s now had three bites of the cherry. That’s what I call high conviction.

In fact, one of the previous times he did such a thing was with Corporate Travel Management, a stock that’s soared over 840 per cent since Scott first recommended it to Motley Fool Share Advisor members.

I’m not saying this is the next Corporate Travel, but it sure has some of the same characteristics.


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Of the companies mentioned above, Bruce Jackson has an interest in Corporate Travel Management.

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