John Dorfman: Greek Default Not the End of the World
Greece has defaulted or restructured five times since 1826, John Dorfman, chairman of Thunderstorm Capital, told Nightly Business Report’s Tom Hudson on Friday. So this is the sixth default, or restructuring for Greece, Dorfman said. The previous defaults weren’t the end of the world, nor was the Argentina default or the Russian default more recently, he added.
Dorfman stated, “I do think we could revisit the recent lows in July or August, partly because of Europe and partly because of the U.S. budget situation.” “But I think we’re most likely going to end the year up,” he added.
Dorfman recommended the stock of automobile equipment manufacturer Magna International (MGA). He believes MGA will benefit from a very diversified customer base and auto sales recovering in the U.S. and holding up better than expected in China, and even in Europe.
Dorfman indicated he was a buyer of Barrick Gold (ABX) and considers it a very good value. He warned that just because he is buying ABX, doesn’t mean it won’t fall further, but ETFs and the sovereign wealth funds are trying to accumulate a lot of gold and the big producers should benefit.
Hudson questioned the logic in Dorfman’s technology pick of Western Digital (WDC) considering storage is moving to the cloud. Dorfman responded he believed the cloud would replace hard drives in 30 years, but not in five years. WDC is a stock they’ve held for three years and Dorfman considered it very cheap here.
Hudson asked Dorfman if he still liked his previous picks of General Motors (GM), Dreamworks Animation (DWA) and Hong Kong listed Jardine Matheson. Dorfman said he still considered them attractive while up year-to-date. GM and Jardine Matheson are down 13 percent and 7 percent respectively since Dorfman’s previous visit, while DWA is unchanged.
Dorfman disclosed he owned all of the stocks mentioned in the interview.