Blue-chips stocks are offering “some of the best opportunities” for investors, says Whitney Tilson of Tilson Mutual Funds.
The potential returns of “big, high-quality” blue-chip stocks should not be passed up, he told CNBC.
While investors are “willing to accept any yield on safe bonds,” despite the “bubble” the bonds could produce, they are shying away from blue-chip stocks such as Johnson & Johnson, Berkshire Hathaway and Microsoft, said Tilson, who co-manages T2 Partners.
Investors currently seem to have “no interest in buying shares of the safest companies” although those are the companies which are performing “quite well,” he said.
Tilson predicts that there is a “reasonable chance” the economy is “lousy” for next few years and continues to be “feeble.”
Investors need to choose “high quality” companies which have “pricing power, dominant market positions” and global footprints to offset any market weaknesses and currency fluctuations.
Stock prices currently appear to be cheap, Bloomberg reported.
“That’s the tug-of-war that’s going on right now. If we are going into a double-dip recession, maybe we’re not as cheaply priced as one would suggest. The other side of it is that if we’re just experiencing a slowdown, but we’re avoiding a recession, then prices are clearly attractive,” said Peter Vanderlee, a money manager at ClearBridge Advisors, a unit of Baltimore-based Legg Mason Inc., which oversees $659 billion.
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