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Scary Market Presents Huge Opportunities: Tilson


If you’re among the throngs of investors running for the exits after the lousy jobs number, hedge fund manager Whitney Tilson thinks  you’ve got it all wrong.

A much weaker than expected jobs report spooked the market Friday, after new data said the economy created only 69,000 new jobs. The Street was expecting around 150,000 new jobs.

On the news, the S&P traded down below its 200-day and the Dow traded negative on the year.

But Tilson, who is found of T2 Partners and a CNBC Contributor, says don’t take the numbers as a sign the US economy is going off a cliff or into a double dip recession.

“The economy currently has 132 million jobs – even the miss of 100,000 jobs is within a margin of error,” he says. Although he concedes the US economy isn't great, he doesn't think it's terrible either. Tilson believe the US economy muddles along, growing slowly - but growing nonetheless.

But that's not the only reason he's hitting the buy button.

Tilson also believes doomsayers who are calling for a catastrophe in Europe are missing an important point. “World leaders won’t allow a complete collapse of the system ,” he insists.

Tilson believes lawmakers learned their lesson from the collapse of Lehman and the resulting mayhem that followed. “Also, Europe is very wealthy – they can throw money at the problem – if nothing more I think they kick the can down the road,” he says.

If you agree that the US economy muddles along and that Europe does not implode, Tilson tells us the conclusion is, “stocks are cheap.” And in this kind of environment, Tilson looks for value.

His strategy is buying value stocks that are out of favor. "Citigroup and AIG are trading at half of tangible book – Goldman is trading at a 25% discount to tangible book. We think these stocks are way too cheap.”

And Tilson also tells us he’s adding to his positions in Netflix and JCPenney. "The value is still there," he insists. "When the story is the same and the price is lower – buy more.”


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Posted by CNBC's Lee Brodie

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Trader disclosure: On June 1, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Jon Najarian is long FB CALL SPREADS; Jon Najarian is long DAL CALL SPREADS; Jon Najarian is long JPM CALL SPREADS; Jon Najarian is long GS CALL SPREADS; Jon Najarian is long VIX CALL SPREADS; Jon Najarian is long CIGX; Jon Najarian is long DDMG; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long GLD; Pete Najarian is long AAPL; Pete Najarian is long AAPL CALLS; Pete Najarian is long C; Pete Najarian is long GDX CALLS; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long PEP; Pete Najarian is long FB; Pete Najarian is long JOY; Josh Brown is long COP; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long XLU; Steve Grasso is long ZAZA

For William Irving
William Irving is long FGOVX

For Paul Sankey
Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from this company within the past year: OXY
This company has been a client of Deutsche Bank Securities Inc. within the past year, during which time it received non-investment banking securities-related services: OXY
Does Deutsche Bank (and/or affiliates) own 1% or more of any class of common equity securities of this company: OXY
company an Investment Banking client of DBSI: OXY
Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from this company within the past year: OXY

For Whitney Tilson
Whitney Tilson is long NFLX
Whitney Tilson is long JCP
Whitney Tilson is long AIG
Whitney Tilson is long JPM
Whitney Tilson is long C
Whitney Tilson is long GS
Whitney Tilson is long WFC

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