“It is a low growth world and I’m investing accordingly,” Passport Capital’s John Burbank told the audience at the SALT Conference today in Las Vegas.
Burbank, speaking on a panel of hedge fund managers giving their best investment ideas, said that his firm’s biggest macro view is that China is changing and that Chinese-owned companies—especially those in the technology space—are growing at a rapid clip and present great potential for investors.
“I would argue that we have no idea how big the Internet and ecommerce is going to be in China because it is leapfrogging,” said Burbank, adding that he prefers companies that went public after the Sino-Forest scandal.
Speaking on the same panel, legendary value investor Leon Cooperman was more specific with his best investment idea—he loves the company Monitise, which produces applications that allow users to bank from their phones.
“This is a growth business,” said the Omega Advisors CEO, adding that he recommended Monitise at the conference last year, and is has gone up 65% since then.
“I truly believe that if I come back next year and I’m still above ground and healthy, that it will double from where it is today. And I believe if I come back a year after that, it will double again,” said Cooperman.
As for Cooperman’s view on bonds, he summed it up with a nice analogy: “Buying government bonds is like walking in front of a steamroller to pick up a dime – you might get away with it, but it isn’t a good policy.”
Pine River Capital’s Steve Kuhn gave a more staid presentation, saying low volatility stocks outperform in the long-term.
“One thing I would recommend is replacing the traditional 60-40 allocation to stocks and bonds with 100% stocks, maybe you shouldn’t have any bonds,” he said.
Specifically, Kuhn likes stocks he calls “boring” but “beautiful” stocks, recommending ConAgra Foods, Agco, and RockTenn.
“The thing I like about all of these companies is that you won’t be decimated by Google. Google is not going to come and start making paper products and paper packaging for your Amazon shipments better than RockTenn,” he said.
“These three companies all have great valuation metrics and exhibit that ‘boring is beautiful.’”
Jeff Kronthal of KLS Diversified Asset Management followed with his best bets.
“We like long duration treasuries and we don’t like short duration TIPS,” he said.
“We are heavily weighted toward structured products,” said Kronthal, adding that his favorite play is European CLO equity.”