An Opportunity to Jump On

Economic crises always create opportunities for those who can take advantage of them. Many folks are worried about a possible inflationary future, but there are many things -- bigger-ticket luxuries such as vacation homes and boats, for example -- selling at steep discounts to recent prices. In most cases, the story is simple: There are just too many overextended people trying to cut back, and not enough buyers stepping in.

Because I'm a car geek, one indicator I watch is the used Ferrari market. One model I've long admired is the Ferrari 456 GT, a 1990s-era V12-powered beast with achingly beautiful (to me, anyway) lines. A lot of modern Ferraris are garish, but this one ... wow.

Ahem.

Anyway, 456 GTs cost more than $200,000 new, but all new cars depreciate, and these models seemed to settle, a few years back, at around $75,000. That's where most car-market watchers expected them to stay, and since even that is more than I'm likely to spend on an automotive toy, I never really expected to own one.

But things change ...
But I recently saw one on eBay with a "Buy It Now" price of $40,500. A nice one. And I've seen several others sell in that price range recently. Nice ones. If I hadn't just bought a new house, spending a considerable portion of our family's savings in the process, I'd be tempted. (Actually, who am I kidding? That's not a temptation I'd fight for very long.)

Right now, though, it just wouldn't be a Foolish move -- we've got other financial priorities at the moment, and I'm too debt-averse to take a loan to buy a toy. But the economy has created some Foolish buying opportunities that I am considering -- and one in particular that I urge you to take a look at as well.

A unique investing opportunity
Anyone who has ever researched actively managed mutual funds knows that there are good funds, there are bad funds ... and there are a very few great funds. Some of those great funds are well known -- American Mutual Fund (AMRMX), Vanguard Windsor II (VWNFX), and a couple of Fidelity and T. Rowe Price offerings come to mind. Others are lesser known, almost insider secrets -- the wonderful Sound Shore (SSHFX), for instance, a smallish fund currently trolling large-cap value waters with stocks such as Boston Scientific (NYSE: BSX  ) and Time Warner (NYSE: TWX  ) .

Many great funds were closed in recent years, as capital appreciation and new inflows swelled them up to nearly unmanageable sizes. But just as with Ferraris and beachfront houses, the market slump has led a few of these legends to shrink in value -- and to reopen.

For those of us in Fooldom who follow the fund business, one reopening in particular has attracted our attention in a big way. Amanda Kish, lead advisor for the Fool's Champion Funds newsletter service, felt so strongly about it that she made it the centerpiece of the newsletter's new issue, which is available online at 4 p.m. ET today.

This fund has been closed for a long time -- so long, in fact, that it has flown under the media radar for years -- but it's absolutely a textbook example of a "great fund," and it's not likely to stay open for long. Consider:

  • Its lead manager has nearly two decades' worth of experience at the helm -- and a market-beating track record through the 2000-2002 bear market (and so far through this one, too). As Amanda often notes, manager tenure is a key predictor of fund performance.
  • It has an S&P 500-trouncing history in bull markets as well, and a history of finding the best "sure-thing" investments year in and year out.
  • There's no load, and total expenses are well below those of many competitors.
  • The manager is supported by a deep group of analysts and a solid, well-funded infrastructure -- a key condition for ongoing success.

Recently, the fund's manager has been building big positions in tech giants such as Apple (Nasdaq: AAPL  ) and Google (Nasdaq: GOOG  ) that should rebound well once the economy improves. Balancing that out, the fund also has sizeable exposures to the kinds of recession-resistant consumer stocks (think Coca-Cola (NYSE: KO  ) , Procter & Gamble (NYSE: PG  ) , and Johnson & Johnson (NYSE: JNJ  ) , for example) that are likely to hang tough -- and pay dividends -- no matter where the economy goes over the near term.

The upshot
Long story short, this fund's manager looks for (and finds) growth, but of the steady-and-upbeat variety, avoiding moonshot-type stocks and the volatility and risks that tend to come along with them. It's not likely to beat the index by 40% anytime soon, but it's not designed to -- a solid, steady level of outperformance is the goal. If you have a big position in an S&P 500 index fund and you're looking to get a little more than the index is giving you, this fund merits serious consideration.

What's the fund? I don't want to spoil the surprise -- check out Amanda's full report on this quiet Wall Street legend in the new issue of Champion Funds. It's a subscription-only service, but you can get complete access for 30 days with a no-hassle free trial. Just click here to get started.

Google is a Motley Fool Rule Breakers pick. Apple and eBay are Motley Fool Stock Advisor recommendations. eBay and Coca-Cola are Motley Fool Inside Value selections. Coca-Cola, Johnson & Johnson, and Procter & Gamble are Motley Fool Income Investor picks. Sound Shore and Vanguard Windsor II are Motley Fool Champion Funds recommendations. The Fool owns shares of Procter & Gamble. You can try any of our Foolish newsletter services free for 30 days with no hassle and no obligation.

Fool contributor John Rosevear is determined to get some Vitamin V12 into his garage before the gas is all gone. He owns shares of Apple. The Fool's disclosure policy would rather speed around Spa like Schumacher than bend it like Beckham.


Read/Post Comments (14) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 27, 2009, at 5:03 PM, crm14210 wrote:

    I'm getting a little tired of playing your game and wasting my time. Recently, I have been trapped into reading the Motley comments that come in the daily email blast only to find out at the end of the essay it is full blown sales pitch. Enough.

    Tell me up front the blog is a sales pitch and that you will not share any information without paying. I don't like wasting my time any more than you do.

    Thanks

  • Report this Comment On May 27, 2009, at 5:15 PM, brad7373 wrote:

    Your solicitations are getting old. My losses pile up on truly foolish recommendations, and I have to read this solicitation for more of my money disguised as advice. What little credibility TMF has left with mine is now history!

  • Report this Comment On May 27, 2009, at 5:27 PM, rules47 wrote:

    Stop sending me information that turns out to be a solicitation. You are wasting my valuable time!

  • Report this Comment On May 27, 2009, at 5:42 PM, bdbtn wrote:

    DITTO!

  • Report this Comment On May 27, 2009, at 5:56 PM, KarmaKnight wrote:

    To be a fool used to be about learning with a group of non professionals doing foolish things that professionals would never do. We could afford to do so because we do not have the scale or responsibility of the big money managers.

    Now TMF has degenerated to sales pitches. We are asked to do precisely what we were taught (originally) not to do - i.e. seek out and follow the advice of the WISE ONE.

    This is depressing...

    The style of solicitations makes it even more disgusting...

  • Report this Comment On May 27, 2009, at 7:02 PM, HIEROHEAD wrote:

    I agree with everyone on this board. Stop wasting our time with your pitches for all of your other useless investing tools. First its Stock Advisor, next its Rule Breakers, next Inside Value, next Champion Funds, next Income Investor - ENOUGH with the BS.

  • Report this Comment On May 27, 2009, at 8:27 PM, 6gbarton wrote:

    It is admirable that you are willing to post all these negative comments about your unabashed OVERKILL with solicitations to your various newsletters. After reading what you think is going to be a recommendation because I subscribED to a few different newsletters, I was totally turned off to find it usually meant subscribing yet to another one. In short, a total rip off and people are beginning to spread the word. Once someone has paid hundreds of dollars to subscribe and then be inundated with more advertisements...sucks. I unsubscribed as has a lot of people I know.

  • Report this Comment On May 27, 2009, at 10:07 PM, tedski2000 wrote:

    Add me to this growing list of disillusioned "subscribers." MF said I was signing up to recieve "newsletters." All I've ever gotten are come-ons and sales pitches.

  • Report this Comment On May 28, 2009, at 11:54 AM, skip2047 wrote:

    Still want answer to the question :An Opportunity to Jump On????????

  • Report this Comment On May 28, 2009, at 12:50 PM, eekay wrote:

    I'm a little confused by the hostility from all the readers here. The Fool is a business just like any other, and they don't have sugar daddies or fairy godmothers paying their staff to write all these advice columns -- they sell subscriptions to pay the bills.

    If you think there's such a thing as a free lunch, you clearly haven't been reading fool.com for very long.

  • Report this Comment On May 28, 2009, at 3:02 PM, bernbern0 wrote:

    I agree with eekay. Obviously Motley Fool is selling investment advice. You do not have to buy to read. In fact, if you folks are that upset, why do you keep reading? I guess you're the real fools!

  • Report this Comment On May 29, 2009, at 8:29 PM, 50Ozi wrote:

    I thought this was an almost irresistible sales pitch for a FREE 30-day trial, just I don't have the time right now.

  • Report this Comment On May 29, 2009, at 11:08 PM, Vesta108 wrote:

    People,

    Please stop wining now and subscribe to TMF Pro. I started to invest following their moves in October'08 using up to 53,000 in my IRA account for stocks and options. We are in Bear market still, but since October I made 8,000.00 after commissions. My husband's account increased at comparable rate since January 2009. We payed $1000 (special offer) for 2-year membership. Those Motley Fool analysts have to earn a salary, just like me and you. Without their work, could we have made this much money in a Bear Market?

    I had no idea about investing prior to this. I spend about 2 hours per week on educating myself with The Motley Fool and placing our trades. That's not a bad return for a 1000.00 fee. And my first year isn't even over yet.

  • Report this Comment On June 02, 2009, at 12:24 PM, paparoger wrote:

    I also see the frustration of reading an article only to find out another pitch. Ok I add rule breakers, to my stock advisors.Now i can see a hot stock that could be the mother load, that's what need, the more I read the more excited I was getting but don't you know it now I need to buy hidden gems to get it..

    now subscribe to three,

    is there a place to find articles in any of 3 catagories that will find no more ads?

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