As a dedicated value investor, I'm always on the lookout for well managed companies with a strong product and solid fundamentals that have temporary problems that knocked its stock price down. By focusing on the long term outlook, you can find great stocks at deeply discounted prices for reasons that may no longer apply come next quarter.
The stock I'm talking about is Harley-Davidson (HOG). This $12 billion motorcycle manufacturer is an American icon and one of the most recognizable brands on the planet. The company also reported disappointing results in its latest earnings release and the stock tumbled down around $6 -- just shy of its 52-week low.
Everybody knows that Benjamin Graham was the father of value investing.
He was the first set down for the public the idea of buying stocks and bonds when they traded at a discount to their real value. His writings are still used as the primary text for value investors around the world, and his classroom at Columbia University has produced some of the greatest investors in the history of the markets.
Investors who were taught the craft by Graham's students have also done very well over the years, and some of the top-performing investment managers today can trace their heritage back to Graham's classroom.
But most investors today are not aware the idea of value investing also has a cantankerous grandmother figure.
Investors often suffer from home-team syndrome. US investors are particularly guilty of looking at only the stocks located in their home markets and ignoring the rest of the world.
The truth is that while something on the order of 11,000 stocks trade here in the United States, shares of more than 50,000 companies trade around the world. More than 1,800 companies trade on one of the various US exchanges, giving us unprecedented access to foreign securities.
As value becomes harder to find in the domestic markets, it makes a certain amount of sense to cast your eyes on the international markets in search of long-term returns.