Michael van Biema, whose value-focused firm’s funds garnered several InvestHedge awards in 2010, says the Asian markets are offering particularly good opportunities for value investors.
“They’re getting really, really cheap again, which of course, we like,” van Biema tells Forbes.com in reference to Asian stocks. “And you get a huge tail wind of growth. The best environment for a value investor is a place where companies get highly mispriced, so that you can buy firms that are undervalued in an overall economic environment where there’s a lot of growth. We see that in Asia. We see that in Latin America and some of the other emerging markets. But Asia in particular has worked really well for us, and I predict that it will continue to work really well for us. We expect bumps on the road. But bumps on the road are part of the deal, so to speak.”
Van Biema says the rise of the Chinese middle class is a key driver of Asian growth, and he says he’s also confident that China’s leadership will be able to steer the country so that it doesn’t have a “hard landing”.
While many investors abhor volatility, van Biema says he welcomes it, because it offers major opportunities for value investors. He says he’s finding such opportunities in the healthcare and consumer sectors in China — but he warns that “you can’t buy those companies every day. You have to be careful, because the prices vary significantly. Sometimes they’re cheap, and sometimes they’re pretty expensive. Since it is such a momentum, growth driven market, these companies will get popular for a period of time, and then something will happen where everybody hates them. When everybody hates them, there’re great buying opportunities for us.”
Van Biema also says the U.S. is “probably better shape than most people give it credit for. … We’ve been able to buy some very high quality, larger cap companies at very cheap prices.”