David Herro Sees Market Opportunity
Herro said investors were overpaying for safety which has led to a wide discrepancy in the valuation of those assets versus financials, consumer discretionary, and industrials names. This market bifurcation last occurred in late 2008 and means there is a lot of opportunity according to Herro.
Herro’s stock picks in this environment included Glencore, Credit Suisse, Honda, Intesa Sanpaolo, and BNP Paribas. In the interview (available below), Herro elaborated on the dynamics of Glencore’s business and prospects.
Herro responded to a question regarding the effects of Brexit and said the impact would be minimal on the long-term cash flow streams of the majority of businesses.
In late 2013, Herro saw political and economic stability improving worldwide creating a backdrop of better fundamentals for European companies [link].