On Target: The Noflationist Case for Blue Chips
Thanks to Martin Spring
for this edition
of his always topical report which this month focuses on a theme Fullermoney
has championed - companies with a global franchise, offering attractive yields
and leverage to the growth of the global middle class . Fullermoney is quoted
here but don't hold that against him. The report is posted without further comment
but here is a section:
Bill Miller, chief investment officer at Legg Mason Capital Management, says now is "a once-in-a-lifetime opportunity… to buy the best quality companies in the world at bargain prices. The last time they were this cheap relative to bonds was
1951."
Rory Gillen of Ireland's InvestR Centre is promoting the idea that US global consumer franchise stocks are "a decent port in a storm."
They "offer the most basic of products or services, yet have unique attributes that investors often overlook. They offer defensiveness in their earnings, no financial risk (currently), mixed currency and emerging markets exposure and, following the decade-long bear market in equities, better value than they have in possibly two decades."
The earnings yield available from a handful of such stocks is more than twice the yield on US government ten-year bonds, yet there is a "high probability" of future growth in their earnings.
"The repetitive nature of the demand for Coca Cola's products in difficult as well as buoyant economic conditions, its bullet-proof brand, and global distribution power" provide its earnings with resilience.
