Cash Is Trash? Not To These Value Fund Managers – Bloomberg 07-26-13

Salient to Investors:

The Weitz Value and Weitz Partners Value funds each have cash stakes close to 30 percent. The Yacktman Focused fund has 19 percent in cash. The Westwood Income Opportunity fund has 16 percent in cash,  The IVA Worldwide Fund has 28 percent in cash, the GoodHaven fund has 33 percent in cash.

Morninstar says the average diversified US stock fund has less than 5 percent in cash, while the the average world allocation fund has less than 15 percent in cash.

The Leuthold Group reports that the median PE ratio for large-cap value stocks is 13 percent to 25 percent above its long-term historic norm; large-cap growth stocks trade at an 8 percent to 10 percent discount to their historic norm.

Charles de Vaulx at IVA Worldwide is not finding enough mis-priced securities to buy.

Tom Forester at Forester Value fund said central banks are driving the markets higher, not fundamentals.

Dowe Bynum at the Cook & Bynum fund is more than 40 percent in cash and says it would take a 10 percent to 15 percent drop in any of their existing holdings to consider putting cash to work.

Mark Freeman at the Westwood Income Opportunity fund says bonds are too expensive and expects a transitional market to higher bond yields to last 6 months to a year.

Read the full article at  http://www.bloomberg.com/news/2013-07-26/cash-is-trash-not-to-these-value-fund-managers.html

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