For anyone who manages money, Christmas came early today. Not because one of the worst quarters in recent memory is closer to coming to a close—a putrid affair that was punctuated today by 123 new 52 lows on the NYSE, and 185 new lows on the Nasdaq.
No, the reason we should rejoice is because finally there's an opportunity to make money again in the market, and my "Call-to-Action" today is one that served me well for so many years at Neuberger Berman: Be contrarian.
When there are this many new 52-week lows to pick from at the end of a quarter, surely there are bargains to be had, and here's why:
At the end of the quarter, many portfolio managers look to wash their hands of losers and start anew. This leads to forced sales for the mere purpose of taking underperforming names off their books.
This is an opportunity for you. In spite of all our economic troubles, I'm not convinced all of those stocks resting at 52-week lows are as bad as their stock prices would suggest.
And with that, here are some names that I feel, with the proper due diligence, could provide some value going forward.
- Exxon Mobil
- Morgan Stanley
- JC Penney
- Charles Schwab
These companies have little in common, except for one thing; investors have discarded them out of frustration.
So start your quarter right by sifting through others' trash. You could find your own treasure.