Summary
Reversion to the mean is still the most powerful force in finance, says Steven Galbraith, Morgan Stanley's chief market strategist. "That's why I think international stocks will trounce domestic stocks the rest of this year. We've still got eight years to unwind from U.S. stock overperformance compared to non-U.S. stocks. It could be another tough year for domestic stocks, although not a bloodbath. Interest rates will trend higher, but not a ton."
-- Sound Shore Fund looks for beaten-down stocks with solid fundamentals. It scrutinizes 1,250 U.S. issues, looking for those selling at large discounts to their historical price multiples. Then it interviews their managements, customers and rivals to judge their competitive positions and prepare detailed financial and valuation models. This thoroughness has produced 12.9 percent average annual gains over the past decade. Recent favorite stocks: Aetna, Baxter International, Countrywide Financial, Devon Energy, Georgia Pacific, Liberty Media, SPX, Time Warner.See the full content of this document
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Domestic Stocks May See Hard Year
-- More than 90 percent of the oil shipped from the Middle East is carried by tankers, notes The Energy Strategist (TES) newslett...
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