March 16, 2020 BARRON’S 19
“At times like this...
think about
balance-sheet
risk.”
Rupal J. Bhansali
CIO, International &
Global Equities portfolio manager
Ariel Investments
New Yorkinflation, I don’t see the bond market deteri-
orating much. The credit markets are where
I’d spend a lot of worry. Leverage in the sys-
tem is huge, and is kind of covered up. There
is a desire on the part of many institutions to
avoid mark-to-market; they love mark-to-
model. I’m talking about venture capital,
private debt, private equity.
Do any stocks appeal to you now?
“The market is
starting to get
attractive.”
Henry Ellenbogen
CIO and managing partner
Durable Capital Partners
Chevy Chase, Md.I recommendedWalt Disney[DIS] at the
January Roundtable. It has gotten smoked,
down about 35% since then. I still like it.
And I still think some health-care names
will be good.Centene[CNC] andUnited-
Health Group[UNH] are two big holdings
we continue to like.Merck[MRK] is a big
player in vaccines; it potentially could be a
winner.Amgen[AMGN], which is big in
biologics, is another potential winner. Also,
the financial exchanges are likely to do well.
I own a lot ofCME Group[CME]. It tends
to protect you when the market is selling off,
and is almost a diversifier when the market
goes up. It’s a great company.—L.R.R.
RUPAL J. BHANSALI
Barron’s: How does the current crisis
compare with 2008?
Rupal J. Bhansali:On one hand, it is worse
than 2008, which was isolated to the hous-
ing sector with some spillover to the mort-
gage-backed securities market. This slow-
down—and the hit—are more widespread.
Many companies have taken on a lot of debt
in the past 10 years, as the cost of debt ser-
vicing was manageable. But debt has to be
repaid and refinanced. That will be exposed
in this cycle. The Fed could rescue the banks
in 2008. It can’t rescue the corporate sector,
so the pain will be more widespread among
the investor base.
A recession is inevitable, in my view. Mar-
kets weren’t paying attention to the risks of
the corporate debt binge, which I’ve been
“We don’t see a
global meltdown
similar to the
financial crisis.”
Sonal Desai
Portfolio manager and CIO
Franklin Templeton Fixed Income
San Mateo, Calif.- Jim Cullen, Chairman & CEO
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“Invest for the long term and
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The rest is noise.”
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