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Tilson also believes doomsayers who are calling for a catastrophe in Europe are missing an important point. “World leaders won’t allow a complete collapse of the system ,” he insists. Tilson believes lawmakers learned their lesson from the collapse of Lehman and the resulting mayhem that followed. “Also, Europe is very wealthy – they can throw money at the problem – if nothing more I think they kick the can down the road,” he says.
If you agree that the US economy muddles along and that Europe does not implode, Tilson tells us the conclusion is, “stocks are cheap.” And in this kind of environment, Tilson looks for value.His strategy is buying value stocks that are out of favor. "Citigroup and AIG are trading at half of tangible book – Goldman is trading at a 25% discount to tangible book. We think these stocks are way too cheap.”And Tilson also tells us he’s adding to his positions in Netflix and JCPenney. "The value is still there," he insists. "When the story is the same and the price is lower – buy more.”
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