A question I’ve been getting a lot lately is: “What should we do now?” I think intuitively many people understand how this economic environment presents some phenomenal buying opportunities, but when it seems like there is no ‘safe haven’, no market in the world that hasn’t been dramatically affected, where do you put your money going forward? How can you position your portfolio for the best potential recovery, without gambling it on the next Bear Sterns or Lehman Brothers?
I read an article in the Globe and Mail last week about Dr. Nandu Narayanan, a global investment fund manager who not only predicted the current crisis, but has managed to earn his investors an incredible return in a market where most fund managers would be happy to just be flat. He has some strong ideas about where he sees the best opportunities in the future, and guess who’s at the top of the list?
From the Globe and Mail:
His CI Global Opportunities Fund has returned 57 per cent in the past year, 19 per cent (compounded) over the past five. Nice numbers, but once you’ve made your money calling the credit crisis and short selling Washington Mutual, what do you do then?
You buy Canada, says Mr. Narayanan, who can’t believe the way the loonie has been savaged. “The currency is ridiculously undervalued. I can’t think of any country in the world that has no fiscal deficit, no trade deficit and no inflation – except Canada. I think the Canadian dollar should go through parity.
“I like the whole Canadian market. I don’t particularly dig the banks because I just don’t know what’s in there [on the balance sheet]. But I’d say virtually everything else is fine.”