Edwin “Tim” Johnston III, founder of Buffalo-based Sandhill Investment Management, shared his views on the markets in a recent interview with Barron’s.

Here are some highlights from Johnston’s comments:

• On the stock market: “We sold quite a bit of stock last summer because it was very clear that valuation levels were not sustainable.”
• Investment methodology: “The gospel for us is speaking to the companies. We talk to a lot of CEOs personally, to chief financial officers, to the investor relations departments, numerous analysts on the Street.” Revenue growth, he says, remains healthy, so “we remain constructive.”
• “We’re 10 years into an economic expansion. The average economic cycle is seven years. At some point, we will have a meaningful correction.”
• Global news: Although news media channels focus on Chinese tariffs, Brexit, interest rates and the border wall, Johnston says “we don’t think they will have a long-term impact on the market.”
• Two of Johnston’s biggest concerns are; (1) the social divide and the wealth gap, and (2) the federal deficit.
  • Wealth gap: Johnston points out that 0.1% of the U.S. population accounts for 12% of our national wealth—”the last time that happened was in the 1920s. And the discourse is getting divisive: We’ve forgotten that we’re all on the same team.”
  • Deficit: “We’ve gotten lazy with regard to our debt,” says Johnston, who points out that the federal deficit is now just under $22 trillion and “keeps me up at night.”
• Stock-picking approach: “We look for companies with structural competitive advantages that can be exploited over a long period.”
• Hot sectors: “Financial technology is a hot area right now. Consumer demand is causing banks to update their systems to compete more efficiently.”