Whitman, Eveillard: Markets present rare opportunities

While many investors have fled the markets in recent months, one of the most renowned and longest-tenured portfolio managers in the investment management industry sees significant upside on the horizon. “The opportunities today, from the bottom up, are certainly the best I've seen in my lifetime,” Martin J. Whitman, the founder of New York-based Third Avenue Management LLC, told advisers today at the InvestmentNews Retirement Income Summit. Mr. Whitman, 84, one of the most successful value investors in the last 50 years, said that he has identified a number of areas for new investments. But he underscored that while many securities appear to be cheap, he is placing an emphasis on their “creditworthiness,” in addition to their actual values. Mr. Whitman said he has specifically been buying performing loans, which at the moment could offer a 25% yield to maturity. “It's an escape from general market risk for me,” he said, adding that there's a 70% to 90% probability that most of these loans will remain performing until they hit their maturity. At the same time, Mr. Whitman noted that he has been looking overseas for opportunities in the equity markets. Companies listed on the stock exchange in Hong Kong are particularly attractive at the moment, especially if these companies have a considerable presence in mainland China, he said. Jean-Marie Eveillard, a portfolio manager at New York-based First Eagle Funds who joined Mr. Whitman in the address, also noted that he's investing in China right now. “In the [United States] and the [United Kingdom], consumers are tapped out," he said, adding that consumer spending in both countries should be significantly outpaced by consumer growth in China over the next several years.