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George Putnam, one of the country's leading turnaround and distressed investing professionals, shares his timely insight on the economy and turnaround investing opportunities.

Emerging Markets/International Stocks

United States of Europe?

June 15, 2012

What’s the difference between Illinois and Greece? The biggest similarity is that they are both reported to be virtually bankrupt. But the big difference is that Illinois is part of the United States and Greece is part of the European Union. 

If the state of Illinois goes bust, it won’t be great for people holding its bonds, but otherwise economic life will go on pretty much as normal for Illinois residents. Moreover, there won’t be much fallout for residents of Indiana, or Wisconsin or any other state. And nobody is likely to worry about the problems in Illinois leading to the demise of the U.S. dollar. That’s because Illinois is part of the United States, and we have a federal government that can levy taxes and a strong central bank. The European Union lacks those features, and so the problems in Greece are raising fears of economic turmoil in Europe, perhaps leading to the collapse of the Euro.

It remains to be seen if the Euro-zone countries can agree on the strong measures that it will take to stem the turmoil. In the meantime, we would be very cautious about investing in most European securities. As turnaround investors, we would normally be tempted to jump into a situation like this, but right now we find the outcome too difficult to call and the downside risk still too great.

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How To Find Good Value Stocks When They Are Scarce

With U.S. stocks well into their eighth year of a bull marketĀ and the economy showing increasing signs of strength, finding ideal turnaround stocks--those with all three ingredients--can be a needle-in-the-haystack project at best. What is an investor to do in a seemingly barren value stock landscape? Read More.

Market-Beating Profit: The 200+ Club

Turnaround stocks present a unique opportunity for savvy investors to buy in at bargain prices. Take a look at this list of just a few of our purchase recommendations that have realized a return rate of 200% or better:

200+ Club: Value Investing Stock Profits with 200% or Better Return

* Bristow remains in our active portfolio (currently as a Hold), and 2,849% gain is as of 1/17/17.

Bet on These Battered Stocks

Battered Stocks/Tribune Logo: Value Investing from The Turnaround Letter Highlighted in the Chicago Tribune

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Chicago Tribune highlighted this Kiplinger's Money Power write-up on George's contrarian investing approach and The Turnaround Letter's April 2016 monthly turnaround stock pick.

 

Darren Fonda notes, "…besieged stocks often start to recuperate as the headlines fade and investors anticipate a return to precrisis sales and profits. The trick, of course, is to find companies that are more likely to rebound from a setback than collapse entirely."

 

Learn more about Putnam's turnaround investing strategy.