Salient to Investors:
George Elliott at Naftilia Asset Management said:
- Investing in Russia after its 1998 currency crisis, in Argentina in 1992 after it defaulted on its debt, or in the S&P 500 Index in March 2009 at its lowest point in 13 years were the best investment opportunities over the past 20 years.
- Greece will remain in the euro because Europe doesn’t want to risk institutions such as the ECB holding billions of dollars of Greek sovereign debt and a contagion to Spain and Italy. Remaining in the euro creates an incredible investment opportunity from a risk-return perspective, while a return of the drachma, unlikely, means investors could buy stocks more cheaply.
- Greece wants to stay in the euro because property owners would face massive wealth destruction following a return to the drachma
- Likes companies punished by the stigma of being in Greece but that generate most of their business outside the country, and for attractive takeover targets, dislikes investments that emerge simply because of a weaker currency.
Harvinder Sian at Royal Bank of Scotland sees a 90 percent chance Greece will drop the euro within two years because of the difficulty of cutting spending and civil-service jobs.
James Butterfill at Coutts & Co cites huge uncertainty about the clarity and the sustainability of earnings for Greek companies, says the biggest danger is picking the right time to buy stocks because of the risk that Greece can’t fulfill the financial demands required to stay in the euro.
Hans Humes at Greylock Capital Management said the chances of making money in a bombed out market are far higher than if you chase a market that has done very well.
Stavros Siokos at Sciens Capital Management said a Greek exit might benefit companies that do a lot of business overseas, by generating revenue in stronger currencies but with borrowing and labor costs in a devalued drachma.
Read the full article at http://www.bloomberg.com/news/2012-06-20/lonely-hedge-fund-bullish-on-greece-tries-to-woo-investors.html