There's A Bright Side To Volatility and Equity Loss?
Robin Knight
The recent selloff in global equities has left investors tentative about getting back into the market-- but Tom Ognar, Wells Fargo Advantage Growth Fund Manager, thinks that two key opportunities have been created amidst the volatility.
"The Chicago Mercantile exchange had the highest volume day ever in their history this week, even higher than 9/11,” said Ognar to “Squawk on the Street”, and he suggested that the stock is ripe for investment because of its status as a fast growing company.
Ognar sees stocks like the Chicago Mercantile--as a key investment area in the wake of the week’s downturn.
“Growth stocks are the biggest opportunity in the market right now,” Ognar said, “the premium is at a 30 year low so you can buy the fastest growing stocks relative to the rest of the market for as cheaply as you could have (at any time) in the last 30 years.”
Along with the Chicago Mercantile, Ognar thinks that health care and Google are the best plays to take advantage of the lack of premium on growth stocks.
“To buy Google, which grew their revenues close to 70% last year, you have to pay just north of 30 times of 2007 earnings, they are going to grow earnings around 45% this year,” said Ognar.
Diversifying into every type of sector isn’t a problem according to Ognar’s theory as the idea is you just buy the fastest growing companies, because you’re not paying a premium to do it.
