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We thought you might be interested in George Putnam's recent interview with Chuck Jaffe, senior columnist for MarketWatch and host of MoneyLife Radio's "Market Call." Jaffe's weekly columns are syndicated nationally, and his "Your Funds" publication is the nation's most widely-read column on mutual funds.
Jaffe notes, "Everyone loves the idea of a turnaround stock…a turnaround story, but there are specific things that go into a turnaround and that's part of the discipline that allows George to be successful at it….He's got his own definition for it and how it works."
The interview taps George's 30+ years of stock market experience for insight into the "specific methodology" and "discipline" behind his contrarian investing approach. Putnam discusses the troubled energy and retail sectors—with particular emphasis on Macy's vs. Sears: M has solid assets, management and cash flow while "we're not quite sure" how SHLD can solve its mounting challenges.
George notes that a solid turnaround stock prospect "needs new management, assets, improved cash flow or something else that will eventually allow the stock to level off and then rebound." Patience is key with a turnaround situation, however: "…Getting the timing right is extremely difficult….[We] tend to look at things in years rather than quarters."
The interview also shares George's thoughts on Turnaround Letter purchase recommendation General Electric (GE), market timing, the perils of a U.S. Bankruptcy Court filing and the necessity of broad diversification—among other topics. Jaffe concludes his interview with a spirited round of "Hold 'Em or Fold 'Em" to get George's take on listener stock picks, ETFs and mutual funds.
For direct access to a free MP3 of full interview, click the MoneyLife logo below: