The Value Investing Congress is taking place this week in New York City. The Congress, an incredibly valuable forum where some of the world's best value investors come together and share their insights and stock ideas with attendees, is quickly becoming the go-to event for investors. Yet seats are limited to this semi-annual event. But while you miss out on the valuable presentations, investors can still gain great value from the stock ideas presented.
Buying Hard Assets
With the massive influx of currency being added to the global financial system, it's no surprise that many value investors are favoring hard assets. Assets like gold, agricultural commodities and metals were favorites of Passport Capital's John Burbank. Burbank is quite bearish on the current financial state of the U.S., mainly worried that current spending levels are unsustainable. Burbank mitigates this concern by buying companies with hard assets that he feels will face great demand in the future. One of his favorite assets is crop nutrient potash. China will continue to need growing amounts of potash as well as nitrogen and potassium in order to meet its food productions goals. Burbank has huge stakes in the major fertilizer companies including Mosaic (NYSE:MOS) and CF Industries (NYSE:CF).
Speaking of hard assets to counteract financial turmoil, gold is one asset where value investors fall on both sides of the argument. According to Burbank, gold is a "must have" investment in today's world. Unfortunately, many fund managers prefer to own physical gold which could be difficult for the individual investor. The reason is that owning gold through the SPDR Gold ETF (NYSE:GLD) carries with it administrative expenses. (For more, see 5 Gold Ideas Off The Beaten Path.)
Burbank is also a fan of blue chip yield plays that are currently yielding well above Treasuries. One name, Microsoft (Nasdaq:MSFT) is also a pick of Lee Ainsle of Maverick Capital. This cash cow currently yields nearly 3% and recently announced a dividend increase. Other names mentioned as quality yield plays included Dr. Pepper (NYSE:DPS) and Kraft (NYSE:KFT) both of which yield nearly 3% and 4%, respectively. (For more, see Dividend Yields That Beat Bonds.)
As more of the Congress continues with its slate of value investors presenting, stay tuned for more investment ideas and themes to consider in this economy. (For more, see The Value Investor's Handbook.)
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