Bay Street veteran Tom Caldwell appeared on CBC Toronto’s Metro Morning radio show Thursday. Discussing the recent problems in both Greece and China with host Matt Galloway, Caldwell made it abundantly clear that he views recent events as a buying opportunity for clients.
“First off, the world is not ending. Secondly, it’s going to be bumpy. One of the challenges of my job is helping people to quell their emotions and that doesn’t mean to say you put your hands over your eyes and do nothing,” said Caldwell. “For example, during the Greek problems over the last few days I was a buyer of Canadian banks in American terms down about 20 per cent on a currency basis and down another five or six per cent just in the last couple of weeks. I keep rounding out my positions.”
In recent days WP’s heard similar refrains from advisors across the country in recent days suggesting wealth professionals are welcoming the turmoil in both Greece and China with open arms. It seems a good crisis is the friend of value investors.
“I’ve been through many, many crises including the Cuban Missile Crisis where you thought you were going to be in a nuclear war in the next hour and a half. So, these [Greece and China] are concerning events. Don’t get wrong and I don’t mean to diminish it,” said Caldwell. “With all due respect the job of the media is create bargains for me,” said Caldwell. “A million people go to work on the subway today. Somebody does something stupid. Guess who makes the paper?”
Of the two crises it’s clear that China is the more serious of the two. WP asked Matthew Bishop whether clients were talking about the situation.
“I haven’t had any clients with concern or telling me anything. I think a lot of clients hold back to see their own portfolios and how it affects things and as long as their statements continue to look good we tend to stay complacent on what’s going on elsewhere,” said Bishop. “For now, where most people’s money is, which is mainly in North America, it’s been isolated. We haven’t seen a long term drop here yet. I certainly think it will transcend everywhere once it goes bad everywhere.”
Once again, this means opportunity knocks for advisors looking for cheaper stocks.
“I’m always looking for the opportunity within crisis,” said Caldwell. “The other part of my job is discerning what’s important. What’s really decisionable. How big and how bad is it? Shifting through those factors my job is to find opportunities.”
See more: China – not Greece – threatens Canada