Slow and Steady Really Does Win
Looking past the fits and starts of short-term trading and investing has some very salutary benefits for investors, writes Jeff Auxier of Auxier Asset Managment.
Gregg Early: I am here with Jeff Auxier, president and CEO of Auxier Asset Management and the Auxier Focus Fund (AUXFX).
Jeff, one of the things that you have been talking about and mentioned in a recent Fortune article where you were featured was that deleveraging across the globe has brought about certain opportunities in certain sectors. Could you tell us more about that?
Jeff Auxier: Yes. The first thing, Gregg, is we want to look at the balance sheet of the businesses we're in, but also in a macro environment and where we are in debt levels and the stages of deleveraging.
So the developed countries of Europe and US and UK are in a period of deleveraging-basically, excessive indebtedness has led to a period, probably the next seven years, of painful cutbacks. That is a period that leads to people buying necessities, and we like the lower-ticket necessities at this time, generally.
Gregg Early: So you're looking at the developed markets where their consumers are moving down the scale as opposed to up the scale. They are buying their necessities, but they might not be buying a sub-zero refrigerator.
Jeff Auxier: Yeah. Well, there are two kinds of stories going. The first one-that's a lot more exciting-is you've got a 1.8 billion-person emerging middle class now, and we're adding each year 150 million people to that middle class.
Again, in these countries, this urbanization that is taking place, and also this is the most rapid urbanization industrialization in history in Asia.