MAI Capital's Chris Grisanti on Investing in Unpopular Markets and Value Stocks

Navigating an Expensive Market

• 💡 Investors are advised to stay invested rather than trying to time the market, avoiding being scared out.
• 📌 The strategy involves staying unpopular, meaning focusing on areas that are not leading the market or are not overly expensive.
• 🎯 A key recommendation is to stay behind the speculative frontrunners, akin to running a marathon pack rather than the lead runner.

Outperforming Top-Heavy Indices

• 🚀 This strategy aims to outperform a top-heavy index by focusing on less expensive, unpopular segments.
• 📈 In the early 2000s, unpopular groups not only outperformed but also provided absolute positive returns during a negative market.

Preferred Investment Sectors and Stocks

• 🏥 Healthcare is highlighted as a favorite spot due to its cheap valuation and non-economic sensitivity, offering potential gains even if the economy slows.
• 📦 Stocks like UPS and Kimberly Clark are mentioned as examples of unpopular investments, trading at low PEs with safe dividends.
• 💰 Kimberly Clark, a toilet paper maker buying a Tylenol maker, offers a PE of 12 (vs. usual 19) and a 5% dividend yield.

Economic Outlook and Inflation Trends

• ⚠️ While strategists are bullish, the advice is to diversify away from tech-heavy, expensive stocks as value is showing strength.
• 🚚 UPS, despite being economically sensitive, has seen risk taken out, with its stock down significantly from highs and moving past its relationship with Amazon.
• 📈 A trend of more inflation than in the past is anticipated, suggesting that commodities and materials may perform well, similar to the 1970s.