Kenneth Fisher says investors continue to be fixated on the problems of the recent past, which is preventing them from seeing opportunities in the present.
“Generally, one thing I’ve learned is that when people are adequately fixated on the negative, pessimistic, skeptic and snarky; to be in such a mode as to be chewing the cud, ruminating, looking for problems everywhere, they’re not likely to find them because, if they were there, they already would have found them,” Fisher tells Forbes, citing fears of a European bank crisis and fears of slow U.S. growth as two examples of fears currently dogging the market. “Therefore, instead of looking for those problems, it’s a good time to be looking for stocks, because most of the time, stocks actually do well.” The time to be bearish, Fisher says, isn’t when pessimism is high; it’s when “you see bad things other people aren’t fixated on. Right now, people are fixated on every bad thing they can find. So this is, I think, a good time to own stocks.”
Fisher says one place he looks at when searching for stock picks is “areas that are seen as boring and not very good in the developed world, but that actually do very well in the emerging markets and have below-average valuations because they’re dominated by that developed-world thinking.” One example: airlines.
Fisher also says that, given the low-yield environment in the bond world right now, he’s looking at stocks of firms that have some growth potential and strong dividend yields.