Bloomberg‑ An Interview On Stocks Sideways With Harry Rady

Harry Rady, along with his Rady Asset Management team, has always given special attention on over and undervalued stocks being a contrarian investor that he is. In fact, in a 2010 Bloomberg feature, he discussed with Matt Miller how several opportunities lie behind certain undervalued stocks.

 

Following is part of the interview in transcription:

Matt Miller:  Stocks continue to fluctuate today although the banks aren't doing terribly. All three major indexes are down marginally, though, year to date.

Harry Rady, CEO of Rady Asset Management. He manages the Rady Contrarian Long/Short fund and the long‑only Rady Opportunistic Value fund, which is ranked in the top one percent by PESN and FORMA for its performance through June. He says the market is vulnerable right now. He joins us from San Diego with more on that.

Harry thanks for taking some time out of your day for us today. We appreciate it. Let me ask you about where the market's most vulnerable. I talked to you earlier. You think we're going to move kind of sideways here, trade in a range. What are the problem areas?

Harry Rady:  I think it's really a tale of two markets. It's difficult to generalize when you're talking about thousands of stocks. There's always overvalued stocks and undervalued stocks. When I say it's a tale of two markets, I mean that there's been this sort of a beta rally, low‑quality junk stocks that in many cases have rallied 100, 200, 300 percent.

We see opportunity on the short side in shorting these low‑quality junk stocks. These high‑quality, blue‑chip, dominant companies, for whatever reason, have been left for dead, so we an opportunity to buy some very high‑quality, blue‑chip companies trading near their lows. In addition, we see the market trading sideways for the rest of the year. That really lends itself to a long/short manager like us.

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